1. A $30,000 note receivable at 5% per annum is dated 7/1/2015 with a balloon pa
ID: 2421082 • Letter: 1
Question
1. A $30,000 note receivable at 5% per annum is dated 7/1/2015 with a balloon payment of
principal and interest due on 6/30/2016.
Prepare the AJE at 12/31/2015.
2. Bond interest is paid on Jan 1st and July 1st.
Prepare the AJE at 12/31/2015.
3.Record book depreciation (straight line) for 2015:
Building
$8,335
Machinery & Equipment
$16,000
Furniture & Fixtures
$3,000
4. The annual inventory of supplies was taken at 12/31/15 as follows:
Factory Supplies
6,500
Office Supplies
5,700
Adjust to actual as of 12/31/15.
5. Correct a prior entry to adjust inventory:
Reclassify $12,000 out of purchases which should be debited to inventory adjustment
Check Figure
Net Income $ 49,890
1. A $30,000 note receivable at 5% per annum is dated 7/1/2015 with a balloon payment of
principal and interest due on 6/30/2016.
Prepare the AJE at 12/31/2015.
2. Bond interest is paid on Jan 1st and July 1st.
Prepare the AJE at 12/31/2015.
3.Record book depreciation (straight line) for 2015:
Building
$8,335
Machinery & Equipment
$16,000
Furniture & Fixtures
$3,000
4. The annual inventory of supplies was taken at 12/31/15 as follows:
Factory Supplies
6,500
Office Supplies
5,700
Adjust to actual as of 12/31/15.
5. Correct a prior entry to adjust inventory:
Reclassify $12,000 out of purchases which should be debited to inventory adjustment
Check Figure
Net Income $ 49,890
Explanation / Answer
1- No. of Days from 1 Jul 2015 to 31 Dec.2015= 184 Days
[Note- Date 7/1/2015 has been taken as 1 july 2015]
Interest on Note Receivable upto dec.31 2015= [30000*.05]/365*184 =756.16
AJE
Debit: Interest Receivable 756.16
Credit: Interest Revenue 756.16
2- Debit: Interest Expense ---
Credit: Bond Interest Payble ----
Note Bond Amount and Rate is not given hence interest can not be calculated.
3- AJE For Depreciation-
4- Entry for Inventory-
5-
Date Accounting Ledger Debit Credit 31-12-15 Depreciation Expense $27,335.00 Accumulated Dep. On Building $8,335.00 Accumulated Dep. On Machinery $16,000.00 Accumulated Dep. On Furniture $3,000.00Related Questions
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