3. Notes payable. Red Bank Enterprises was involved in the following transactions during the fiscal year...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
3. Notes payable. Red Bank Enterprises was involved in the following transactions during the fiscal year ended October 31: Aug. Oct. 2 20 Sept. 10 11 10 11 31 Borrowed $75,000 from the Bank of Kingsville by signing a 120-day note for $79,000. Issued a $40,000 note to Harris Motors for the purchase of a $40,000 delivery truck. The note is due in 180 days and carries a 12% interest rate. Purchased merchandise from Pans Enterprises in the amount of $15,000. Issued a 30-day, 12% note in settlement of the balance owed. Issued a $60,000 note to Datatex Equipment in settlement of an overdue account payable of the same amount. The note is due in 30 days and carries a 14% interest rate. The note to Paris Enterprises was paid in full. The note to Datatex Equipment was due today, but insufficient funds were available for payment. Management authorized the issuance of a new 20-day, 18% note for $60,700, the maturity value of the original obligation. The new note to Datatex Equipment was paid in full. Instructions: a. Prepare journal entries to record the transactions. b. Prepare adjusting entries on October 31 to record accrued interest. c. Prepare the current liability section of Red Bank's balance sheet as of October 31. Assume the Accounts Payable account totals $203,600 on this date. 3. Notes payable. Red Bank Enterprises was involved in the following transactions during the fiscal year ended October 31: Aug. Oct. 2 20 Sept. 10 11 10 11 31 Borrowed $75,000 from the Bank of Kingsville by signing a 120-day note for $79,000. Issued a $40,000 note to Harris Motors for the purchase of a $40,000 delivery truck. The note is due in 180 days and carries a 12% interest rate. Purchased merchandise from Pans Enterprises in the amount of $15,000. Issued a 30-day, 12% note in settlement of the balance owed. Issued a $60,000 note to Datatex Equipment in settlement of an overdue account payable of the same amount. The note is due in 30 days and carries a 14% interest rate. The note to Paris Enterprises was paid in full. The note to Datatex Equipment was due today, but insufficient funds were available for payment. Management authorized the issuance of a new 20-day, 18% note for $60,700, the maturity value of the original obligation. The new note to Datatex Equipment was paid in full. Instructions: a. Prepare journal entries to record the transactions. b. Prepare adjusting entries on October 31 to record accrued interest. c. Prepare the current liability section of Red Bank's balance sheet as of October 31. Assume the Accounts Payable account totals $203,600 on this date.
Expert Answer:
Related Book For
Construction accounting and financial management
ISBN: 978-0135017111
2nd Edition
Authors: Steven j. Peterson
Posted Date:
Students also viewed these accounting questions
-
Mr. John keeps his books according to single entry system. Following are the details of his business: 01.04.2012 31.03.2013 Particulars Amount (Rs.)Amount (Rs.) 70,000 10,000 Stock 36,000 Sundry...
-
Your company needs to purchase a truck and has narrowed the selection to two pieces of equipment. The first truck costs $70,000 and has an hourly operation cost of $13.00 and a useful life of six...
-
A forklift truck costs $29,000. A company agrees to purchase such a truck with the understanding that it will make a single payment for the balance due in 3 years. The vendor agrees to the deal and...
-
Which statement about sociology as a science is true? A) Most sociologists reject the use of the scientific method. B) Sociologists almost always use hypothesis testing in their research. C) Sociolo...
-
What are "junk bonds"? How might they be used in financing a corporation?
-
What are the parameters of a variable sampling plan for which the process average quality is of interest? Explain the working procedure of such a plan when single and double specification limits are...
-
This question is based on the EViews file HEDGE.WF1 which contains daily data on the percentage returns of seven hedge fund indexes, from the 1st of April 2003 to the 28th of May 2010, a sample size...
-
Describe how a taxpayer might assess the financial solvency and viability of a government using government-wide financial statements prepared according to generally accepted accounting principles.
-
Needs Analysis : The analysis of the information gathered on the community military veterans and mental health. This will provide a conclusions you have drawn from thinking about the findings you...
-
Suppose you are building a first-person shooter game, where virtual zombies are climbing up a wall while the player, who is moving left and right in front of the wall, is trying to knock them down...
-
Overhead allocation is the process of spreading overhead (indirect costs) back to certain jobs, products or cost centers. Use coca colas different productline like dasani water and powerade sports...
-
h = To supply a large city with natural gas, a mass flow of m = 36000 kg is required. The natural gas is taken from a long-distance pipeline (P 50 bar, T 280 K) at a transfer station and is...
-
1) The following data represents points on the demand curve for Jamba Juice orange juice. Price per gallon of orange juice $1 $2 $3 $4 $5 Quantity demanded (in gallons) 18 16 14 12 10 a) Graph these...
-
1. ...
-
Your Great Aunt Tilly needs your help with her summer cottage on Meredith Creek. Over the last 10 years, she has noticed significant erosion along her waterfront property, especially near the...
-
Determine the x- and y-coordinates of the centroid of the shaded area. [0.762, 0.533] T 1L y = kx/3 -|2 X
-
Compare TARP to a large private equity fund. How are its objectives and management different?
-
Which internal control principle is especially diffi cult for small organizations to implement? Why?
-
How much money needs to be set aside today to purchase a new piece of equipment in five years? The money is expected to earn 5% interest compounded annually and the price of the equipment is expected...
-
Determine the average age of accounts payable and payable turns for the construction company in Figures 6-3 and 6-4. Use only the material and subcontract construction costs to calculate the average...
-
A piece of equipment is purchased for $110,000 and has an estimated salvage value of $10,000 at the end of the recovery period. Prepare a depreciation schedule for the piece of equipment using the...
-
Find the maximum of the function using Trust region method \(f=15 x_{1}+8 x_{1} x_{2}+5 x_{2}\) subject to \(x_{1}+x_{2} \leq 10\)
-
Discuss the effect of initial trust region radius (ITRR) on the performance of TR algorithm.
-
Calculate the reduction ratio \(r_{k}=\frac{f\left(X_{k} ight)-f\left(X_{k}+s_{k} ight)}{m_{k}\left(X_{k} ight)-m_{k}\left(X_{k}+s_{k} ight)}\) for the function given in problem 1 .
Study smarter with the SolutionInn App