Question
In: Accounting
On December 31, 2020, Ed Abbey Co. performed environmental consulting services for Hayduke Co. Hayduke was...
On December 31, 2020, Ed Abbey Co. performed environmental consulting services for Hayduke Co. Hayduke was short of cash, and Abbey Co. agreed to accept a $200,000 zero-interest-bearing note due December 31, 2022, as payment in full. Hayduke is somewhat of a credit risk and typically borrows funds at a rate of 10%. Abbey is much more creditworthy and has various lines of credit at 6%. Instructions a. Prepare the journal entry to record the transaction of December 31, 2020, for the Ed Abbey Co. b. Assuming Ed Abbey Co.’s fiscal year-end is December 31, prepare the journal entry for December 31, 2021. c. Assuming Ed Abbey Co.’s fiscal year-end is December 31, prepare the journal entry for December 31, 2022. *Explained step by step please. How to get PV on calculator and please explain how to get the solution. I am having problems to how to get the PV and why the answer is the way it is.
Solutions
Expert Solution
Solution
1.
| Date | particular | Debit | Credit |
| December 31,2020 | Notes receivable. Dr | $200000 | |
| To service revenue | $165290 | ||
| To discount on notes receivable | $34710 | ||
| ( Being the service given against the notes receivable) |
Note
Calculating PV of service revenue as on December 31,2020
PV = future value* present value of $1 at 10% for 2 years
PV =$200000*0.82645
PV =$165290
2.
| Date | General journal | Debit | Credit |
| December 31 2021 | discount on notes receivable. Dr | $16529 | |
| To interest revenue | $16529 | ||
| (Being interest revenue recorded) | |||
Notes
Discount on notes receivable in 2021
=Discount receivable in 2020*10%
=$165290*10%
=$16529
3.
| Date | General journal | Debit | Credit |
| December 31, 2022 | discount on notes receivable. Dr | $181818 | |
| To interest revenue ($34710-$16529) | $18181 | ||
| ( Being interest revenue recorded) | |||
| Cash. Dr | $200000 | ||
| To notes receivable | $200000 | ||
| (Being record the cash received against notes receivable) |
***Please Upvote......Its really usefull to us...If any querry comment below...I will resolve ASAP....Thank You....
ekkarill92 answered 1 year agoRelated Solutions
On December 31, 2020, Ed Abbey Co. performed environmental consulting services for Hayduke Co. Hayduke was...
On December 31, 2020, Ed Abbey Co. performed environmental
consulting services for Hayduke Co. Hayduke was short of cash, and
Abbey Co. agreed to accept a $200,000 zero-interest-bearing note
due December 31, 2022, as payment in full. Hayduke is somewhat of a
credit risk and typically borrows funds at a rate of 10%. Abbey is
much more creditworthy and has various lines of credit at 6%.
a. Prepare the journal entry to record the transaction of
December 31, 2020, for...
By December 31, 2020, Bramble Corp. had performed a significant amount of environmental consulting services for...
By December 31, 2020, Bramble Corp. had performed a significant
amount of environmental consulting services for Cullumber Ltd.
Cullumber was short of cash, and Bramble agreed to accept a
$131,000, non–interest-bearing note due December 31, 2022, as
payment in full. Cullumber is a bit of a credit risk and typically
borrows funds at a rate of 12%. Bramble is much more creditworthy
and has various lines of credit at 8%. Bramble Corp. reports under
IFRS. The tables in this problem...
By December 31, 2020, Bramble Corp. had performed a significant amount of environmental consulting services for...
By December 31, 2020, Bramble Corp. had performed a significant
amount of environmental consulting services for Cullumber Ltd.
Cullumber was short of cash, and Bramble agreed to accept a
$131,000, non–interest-bearing note due December 31, 2022, as
payment in full. Cullumber is a bit of a credit risk and typically
borrows funds at a rate of 12%. Bramble is much more creditworthy
and has various lines of credit at 8%. Bramble Corp. reports under
IFRS. The tables in this problem...
E7-14. (Notes Receivable with Unrealistic Interest Rate) (LO 4, 6) On December 31, 2020, Ed Abbey...
E7-14.
(Notes Receivable with Unrealistic Interest
Rate)
(LO 4, 6) On December 31, 2020, Ed Abbey Co. performed
environmental consulting services for Hayduke Co. Hayduke was short
of cash, and Abbey Co. agreed to accept a $200,000
zero-interest-bearing note due December 31, 2022, as payment in
full. Hayduke is somewhat of a credit risk and
typically borrows funds at a rate of 10%. Abbey is much more
creditworthy and has various lines of credit at 6%. (hint:
look back in...
2. On December 31, 2014, Franklin Company performed consulting services for Hensley Corporation. Hensley was short...
2. On December 31, 2014, Franklin Company performed consulting
services for Hensley Corporation. Hensley was short on cash, so
Franklin Company agreed to accept a $200,000 zero-interest bearing
note due on December 31, 2016 as payment in full. Hensley is
somewhat of a credit risk and typically borrows funds at a rate of
10%.
Prepare the journal entry to record the transaction of December
31, 2014 for Franklin Company.
Assume Franklin’s fiscal year end is December 31, prepare the
journal...
On December 31, 2018, Kohl Company performed engineering consulting services for Hemingway, Inc. Hemingway was short...
On December 31, 2018, Kohl Company performed engineering
consulting services for Hemingway, Inc. Hemingway was short of
cash, and Kohl Co. agreed to accept a $200,000
zero-interest-bearing note due December 31, 2020, as payment in
full. Hemingway is somewhat of a credit risk and typically borrows
funds at a rate of 10%. Kohl is much more creditworthy and has
various lines of credit at 6%.
Prepare the following journal entries for Kohl Co.:
(a) Prepare the journal entry to record...
On December 31, 2020, Jen & Mink Clothing (J&M) performed the inventory count and determined the...
On December 31, 2020, Jen & Mink Clothing (J&M)
performed the inventory count and determined the year-end ending
inventory value to be $75,500. It is now January 8, 2021, and you
have been asked to double-check the year-end inventory listing.
J&M uses a perpetual inventory system. Note: Only relevant
items are shown on the inventory listing.
Jen & Mink Clothing
Inventory Listing
December 31, 2020
#
Inventory Number
Inventory Description
Quantity (units)
Unit Cost ($)
Total Value ($)
1
7649...
On December 31, 2017, Dallas Inc. provided consulting services to Uplem Company at an agreed price...
On December 31, 2017, Dallas Inc. provided consulting services
to Uplem Company at an agreed price of $356,630.79. Dallas accepted
$75,000 down and agreed to accept the balance in six equal
installments of $60,000 to be received annually on December
31st, beginning December, 2018. An assumed interest rate
of 7.5% is imputed.
Instructions:
Using Excel, prepare the amortization schedule and then record
all required journal entries that would be made by Dallas
and Uplem on the following dates (a) December...
On December 31, 2020, Gibbs Co. acquired bonds issued by Walden Co. for $112,290. They have...
On December 31, 2020, Gibbs Co. acquired bonds issued by Walden
Co. for $112,290. They have a face amount of $100,000, pay 12%
interest, and were purchased to yield 10%. The maturity date is
December 31, 2030, and interest is due every December 31. The fair
value of the bonds on December 31, 2021, is $108,500. Required: (1)
Complete the amortization schedule through the first interest
payment on December 31, 2021. (2) Prepare the journal entry(ies)
that Gibbs would make...
As of December 31, 2020, Gill Co. reported accounts receivable of $226,000 and an allowance for...
As of December 31, 2020, Gill Co. reported accounts receivable of
$226,000 and an allowance for uncollectible accounts of $8,600.
During 2021, accounts receivable increased by $22,500, (that change
includes $7,700 of bad debts that were written off). An analysis of
Gill Co.'s December 31, 2021, accounts receivable suggests that the
allowance for uncollectible accounts should be 1% of accounts
receivable. Bad debt expense for 2021 would be:
Multiple
Choice
·
$1,585.
·
$7,700.
·
$2,485.
·
None of these...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- "Ethical Considerations" Please respond to the following: Reflect upon the responsibilities placed on auditors by the...
- A Japanese company has a bond outstanding that sells for 93 percent of its ¥100,000 par...
- What is the difference among the principles of modularization, abstraction, encapsulation, and separation of interface and...
- An investment project costs $20,100 and has annual cash flows of $4,400 for six years. ...
- PUT IN JAVA PROGRAMMING The StockB class: Design a class named StockB that contains the following...
- Draw a DFA for the following ( ∑ = {0,1}): Set of all strings with.
- In the article from Forbes notes that the goal of a leader is not to clone...
ADVERTISEMENT