** What would be the appropriate journal entry for this exercise? 2. Notes payab
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** What would be the appropriate journal entry for this exercise? 2. Notes payable. Sentry Security Systems purchased $72,000 of office equipment on April 1, 19X3, by signing a three-year, 12% note payable to Sharp, Inc. One-third of the principal, along with interest on the outstanding balance, is payable each April 1 until maturity. (The first payment is due in 19X4.) a. Fill in the following table to reflect Sentry's liabilities, assuming a March 31 year-end. March 31 19X4 19X5 19X6 Current liabilities Current portion of long-term debt 24,000 24, 000 24,000 Interest payable 8,640 5,760 2,880 Long-term liabilities Long-term debt 48,000 24,000 b. Assuming that interest is properly recorded at the end of each year, present the proper journal entry to record the last payment on April 1, 19X6.Explanation / Answer
a) completed series of designs that began on July 31 and billed for the total design services performed, including the accrued revenues of $800 that had been recognized in an adjusting entry in July, $1,400. When the adjusting entry was made in July to record the accrued revenues, it was: Dr Accounts Receivable 800 Cr Service Fees 800 You could make a reversing entry, then just debit and credit the whole $1,400 to Accounts Receivable and Service Fees. Or you could: Dr Accounts Receivable 600 Cr Service Fees 600 From adjusting entries: b)services performed for which payment had been received in advance totaled $1,300 When the payment was originally received, the journal entry would have been: Dr Cash 1,300 Cr Unearned Service Fees 1,300 Now that the services have been performed, the entry would be: Dr Unearned Service Fees 1,300 Cr Service Fees 1,300 c) services performed that will not be billed until September totaled $580 Even though the clients have not been billed, the services have been performed. As such, the company is owed for the services. So Accounts Receivable needs to be debited. Dr Accounts Receivable 580 Cr Service Fees 580
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