Question

*** If you're not going to answer them all, please don't bother. Thank you***

Journal Entries

1. A customer pays for his $100 meal in your restaurant using a VISA card. VISA charges you 4% fee.   (VISA pays you the cash immediately).

2. Corp. owes $1,400 for merchandise it bought last month. Terms of the purchase are 2/10/n30.   Corp pays within the discount period.   Prepare Corp.s entry to pay this invoice.

3. Bob signs a $10,000, 8%, 90 day promissory note to you in payment of a past due account.  

4. You collect a $10,000, 8%, 90 day note in full (on the due date)   Note – you did not do any entries to accrue interest. Prepare the entry honoring the note.

5. BeeCorp bought a machine paying $120,000. Estimated life is 60 months.   Using straight-line depreciation prepare the journal entry to record ONE MONTH’S depreciation.

6. JayCo is disposing of a machine fully depreciated machine with an original cost of $25,000.   Prepare the entry to dispose of the machine.                                                

7. WalMart sold a TV collecting $600 PLUS 8% sales tax. Prepare WalMarts entry recording this transaction.

8. BobCo sends a check to pay off his $1,000, 12%, 6 month note. Prepare BobCo’s entry to pay off the note he owes. (He did not accrue interest each month)   

9. JCo sells $50,000 worth of machines in MAY.   JCo expects 8% warranty claims for these machines. Prepare JCo’s MAY journal entry for the expected warranty costs.   

10. Bob is a customer of JCo who owes $1,000. JCo has decided the write off the Bob account using the Direct Write-Off method. Prepare the entry.                    

11. Company issued $1,000,000 of 6% bonds at par. Prepare the entry to issue the bonds.

12. Company issued $1,000,000 of 6% bonds at par. Prepare the entry to pay the first semi-annual interest payment.

13. DCorp issued 10,000 shares of $10 par stock at $17. Prepare the entry to issue the stock

14. ZeeCo declares a $100,000 cash dividend to its shareholders. Prepare the entry, on the date of declaration date, for the dividend. (Note: the dividend will actually be paid out next month).

Answer 1

Journal entries
No.	Account	Debit	Credit	Calculation
1	Cash	$                96
	VISA fees	$                  4		=100*4%
	Sales Revenue		$              100
2	Accounts Payable	$          1,400
	Cash		$          1,372
	Inventory		$                28	=1,400*2%
3	Accounts Payable	$        10,000
	Notes Payable		$        10,000
4	Cash	$        10,200
	Notes Receivable		$        10,000
	Interest revenue		$              200	=10,000*8%*90/360
5	Depreciation expense	$          2,000		=120,000/60
	Accumulated Depreciation-Machine		$          2,000
6	Accumulated Depreciation-Machine	$        25,000
	Machine		$        25,000
7	Cash	$              648
	Sales Revenue		$              600
	Sales Tax Payable		$                48	=600*8%
8	Notes Payable	$          1,000
	Cash		$              940
	Interest expense		$                60	=1,000*12%*6/12
9	Warranty expense	$          4,000		=50,000*8%
	Warranty Liability		$          4,000
10	Bad debts expense	$          1,000
	Accounts Receivable		$          1,000
11	Cash	$ 1,000,000
	Bonds Payable		$ 1,000,000
12	Interest expense	$        30,000		=1,000,000*6%*6/12
	Cash		$        30,000
13	Cash	$     170,000		=10,000*17
	Common Stock		$     100,000	=10,000*10
	Paid in Capital in Excess of Par		$        70,000
14	Cash Dividends	$     100,000
	Cash Dividends Payable		$     100,000