Alli Fox Corporation receives a $10,000 , 10%, 6-month note from Jet Stream, Inc

Question

Alli Fox Corporation receives a $10,000 , 10%, 6-month note from Jet Stream, Inc. on January 1, 2013. Alli Fox Corporation presents the note to Jet Stream, Inc. on June 30, 2013. Assuming no financial statements are prepared, the journal entry to record the collection of the note by Alli Fox Corporation will include a

Select one:

a. debit to Cash for $10,000

b. none of the above

c. debit to Cash for $11,000

e. credit to Interest Receivable for $500

ACCT Corp. has the following balance sheet accounts as of 12/31/15:

Bonds Payable $1,000,000 (due in 2020)

Premium on Bonds Payable $10,000

Note Payable $30,000 (due on 4/1/16)

Notes Payable $100,000 ($10,000 will be paid off every year for the next 10 years)

What amount should be reported as Current Liabilities?

Select one:

a. $130,000

b. $40,000

d. $30,000

Can you please explain the answers in detail please.

Explanation / Answer

1- e credit to Interest Receivable for $500

alli fox corporation will get cash so in its books cash would be debited and Jet Stream, Inc. would be credited

journal entry

cash debit 10500

credit note on Jet Stream, Inc.   10000

credit interest income                    500

2- d $30,000 because Note Payable $30,000 (due on 4/1/16) is the only current liability

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