A business issued a 30-day, 7% note for $67,200 to a creditor on account. The co
ID: 2568786 • Letter: A
Question
A business issued a 30-day, 7% note for $67,200 to a creditor on account. The company uses a 360-day year for interest calculations.
Journalize the entries to record (a) the issuance of the note on April 30 and (b) the payment of the note at maturity, including interest. Refer to the Chart of Accounts for exact wording of account titles. There should be five rows for this journal.
Chart of Accounts...
Required:Journalize the entries to record (a) the issuance of the note on April 30 and (b) the payment of the note at maturity, including interest. Refer to the Chart of Accounts for exact wording of account titles. There should be five rows for this journal.
Chart of Accounts...
ASSETS 110 Cash 111 Accounts Receivable 112 Interest Receivable 113 Notes Receivable 115 Merchandise Inventory 116 Supplies 118 Prepaid Insurance 120 Land 123 Building 124 Accumulated Depreciation-Building 125 Office Equipment 126 Accumulated Depreciation-Office Equipment LIABILITIES 210 Accounts Payable 213 Interest Payable 214 Notes Payable 215 Salaries Payable 216 Social Security Tax Payable 217 Medicare Tax Payable 218 Employees Federal Income Tax Payable 219 Employees State Income Tax Payable 220 Medical Insurance Payable 221 Retirement Savings Deductions Payable 222 Union Dues Payable 224 Federal Unemployment Tax Payable 225 State Unemployment Tax Payable 226 Vacation Pay Payable 228 Product Warranty Payable EQUITY 310 Common Stock 311 Retained Earnings 312 Dividends 313 Income Summary REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Merchandise Sold 520 Salaries Expense 525 Delivery Expense 526 Repairs Expense 531 Rent Expense 533 Insurance Expense 534 Supplies Expense 535 Payroll Tax Expense 536 Vacation Pay Expense 538 Cash Short and Over 539 Product Warranty Expense 541 Depreciation Expense-Building 542 Depreciation Expense-Office Equipment 590 Miscellaneous Expense 710 Interest ExpenseExplanation / Answer
Journalize the entries to record (a) the issuance of the note on April 30 and (b) the payment of the note at maturity, including interest.
date accounts & explanation debit credit Account payable a/c 67200 Notes payable a/c 67200 (To record notes payable a/c Notes payable a/c 67200 Interest expenses a/c (67200*7%*30/360) 392 Cash a/c 67592 (To record payment on maturity)Related Questions
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