As payment for services rendered, the company received a 24-month note on January 1. The face amount
Question:
As payment for services rendered, the company received a 24-month note on January 1. The face amount of the note is $1,000; the note is non-interest-bearing. The cash price of the services rendered is $857. The market rate of interest is 8%, compounded annually. The $1,000 face amount of the note will be received at the end of the 24-month period. Make all journal entries necessary on the books of the recipient of the note during the 24-month life of this note. Don’t forget any necessary year-end adjusting entry. The cash will be received on December 31 of the second year.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 75% (12 reviews)
Year 1Notes Receivable 1000 Jan 1 Discount on Notes Receivable 143 Service Revenue 857 Year 1 ...View the full answer
Answered By
Asim farooq
I have done MS finance and expertise in the field of Accounting, finance, cost accounting, security analysis and portfolio management and management, MS office is at my fingertips, I want my client to take advantage of my practical knowledge. I have been mentoring my client on a freelancer website from last two years, Currently I am working in Telecom company as a financial analyst and before that working as an accountant with Pepsi for one year. I also join a nonprofit organization as a finance assistant to my job duties are making payment to client after tax calculation, I have started my professional career from teaching I was teaching to a master's level student for two years in the evening.
My Expert Service
Financial accounting, Financial management, Cost accounting, Human resource management, Business communication and report writing. Financial accounting : • Journal entries • Financial statements including balance sheet, Profit & Loss account, Cash flow statement • Adjustment entries • Ratio analysis • Accounting concepts • Single entry accounting • Double entry accounting • Bills of exchange • Bank reconciliation statements Cost accounting : • Budgeting • Job order costing • Process costing • Cost of goods sold Financial management : • Capital budgeting • Net Present Value (NPV) • Internal Rate of Return (IRR) • Payback period • Discounted cash flows • Financial analysis • Capital assets pricing model • Simple interest, Compound interest & annuities
4.40+
65+ Reviews
86+ Question Solved
Related Book For
Intermediate Accounting
ISBN: 978-0324592375
17th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen
Question Posted:
Students also viewed these Accounting questions
-
As payment for services rendered, the company received a 36-month note on January 1. The face amount of the note is $1,000; the note is non-interest-bearing. There is no reasonable basis for...
-
Brown Corporation earns $600,000 and pays cash dividends of $200,000 during 2012. Dexter Corporation owns 3,000 of the 10,000 outstanding shares of Brown. What amount should Dexter show in the...
-
As payment for services rendered, the company received an 18-month note on January 1. The face amount of the note is $3,000, and the stated rate of interest is 9%, compounded annually. The 9% rate is...
-
The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow: Sales Variable manufacturing and...
-
A space traveler weighs 540.0 N on earth. What will the traveler weigh on another planet whose radius is twice that of earth and whose mass is three times that of earth?
-
Free cash flow provides an indication of a companys ability to: (a) generate net income. (b) generate cash to pay dividends. (c) generate cash to invest in new capital expenditures. (d) Both (b) and...
-
What are the important goals and considerations of information security?
-
Required Identify which of the following items are added to or subtracted from the unadjusted bank balance to arrive at the true cash balance. Distinguish the additions from the subtractions by...
-
Gold Nest Company of Guandong, China, makes birdcages for the South China market. The company sells its birdcages through an extensive network of street vendors who receive commissions on their...
-
Some data sets contain outliers, observations that fall well outside the overall pattern of the data. (We discuss outliers in more detail in Section 3.3.) Suppose, for instance, that you are...
-
Refer to Practice 7-15. Assume that Cammo received the entire $53,000 in cash immediately. Also assume that the transfer of receivables did not satisfy the three conditions contained in SFAS No. 140....
-
In exchange for land, the company received a 12-month note on January 1. The face amount of the note is $2,000, and the stated rate of interest is 12%, compounded annually. The 12% rate is equal to...
-
Which of the following is NOT a purpose of the transaction processing system? a. managing and reporting on the status of financial investments b. converting economic events into financial...
-
A popular up-and-coming social media company shocked its employees and the public with the announcement that the company was severing ties with one of its senior managers. The manager was a social...
-
Allstate was founded in 1930 as a subsidiary of Sears. As the giant retailer embarked on its great expansion, Allstate sold auto insurance through all of the new stores. Following World War II, the...
-
In 2013, the Canadian academic community was shocked to learn that five established professors in McMasters DeGroote School of Business were sanctioned for harassment and for creating a hostile...
-
Texas businessman Rollin King and attorney Herb Kelleher founded Air Southwest in 1967 as a regional airline linking Dallas, Houston, and San Antonio. Southwest made its first scheduled flight in...
-
Conflict that takes place within an organization can quickly make its way outside the organization, leading to public embarrassment and brand diminishment. This reality hit home for Premier Tech (PT)...
-
What is the purpose of dummy tasks, and on what types of projects would you use them for budgeting purposes?
-
Provide an example of an aggressive accounting practice. Why is this practice aggressive?
-
If the probability is .55 that a marriage will end in divorce within 20 years, what is the probability that out of 6 couples just married, in the next 20 years (A) None will be divorced? (B) All will...
-
Refer to Practice 9-8. Compute the following: 1. LIFO reserve at the end of Year 4. 2. Cost of goods sold for Year 4. 3. Cost of goods sold for Year 4 assuming that units purchased had been 90...
-
Refer to Practice 9-8. Assume that the company has no expenses except for cost of goods sold, the selling price per unit is $5 in each year, and that the income tax rate is 40%. Compute the total...
-
The company sells large industrial equipment. A piece of equipment with an original cost of $100,000 and an original selling price of $150,000 was recently returned. It is expected that the equipment...
-
If you were to enter the banking industry, you might find yourself approving or not approving loans. The following is a good example of a common event you could encounter. Company X is looking for...
-
You see a two year bond with annual coupon rate of 8% that has these flows. Years ahead Cashflows 0 ?? 0.25 0 0.5 0 0.75 1 1.25 1.5 1.75 2 8 0 0 0 108 You will be asked to calculate its price at...
-
Use synthetic division and the Remainder Theorem to evaluate P(c). P(x) = 6x + 5x +9, c = 11/1 P(1) =
Study smarter with the SolutionInn App