Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Chapter 9, Problem 3P
Trade Note Transactions Adjusto Corporation (which is on a December 31 fiscal year-end) engaged in the following transactions during 2019 and 2020:
Required:
Prepare
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The following amortization schedule indicates the interest and principal that Chip's Cookie Corporation (CCC) must repay on an
installment note established January 1, 2021. CCC has a December 31 year-end and makes the required annual payments on
December 31. Use the amortization schedule to prepare CCC's required journal entries on (a) January 1, 2021; (b) December 31, 2021;
(c) December 31, 2022; (d) December 31, 2023; and (e) December 31, 2024. (If no entry is required for a transaction/event, select "No
Journal Entry Required" in the first account field. Do not round intermediate calculations.)
Year
1
2
3
4
Total
Beginning Note
Payable
17,000
13,114
8,995
4,629
View transaction list
1
Repaid Principal
Interest Expense on Note Payable
Journal entry worksheet
Record the notes payable.
Transaction
(a)
1,020
787
540
278
2,625
2 3 4 5
Note: Enter debits before credits.
General Journal
3,886
4,119
4,366
4,629
17,000
Ending Note
Payable
13,114
8,995
4,629
Debit
Credit
PART - E
Toner Limited (“Toner") borrows $180,000 on 1 July 2020 from Lighthouse Bank and signs a $180,000,
5%, 1-year promissory note. Assuming yearly accounting periods and a financial year end balance
date of 31 December.
Required:
(i) Prepare the general journal entries to record the issuance of the promissory note.
(ii) Prepare the general journal entries to record the adjusting journal entries as at 31 December
2020.
(iii) Prepare the general journal entries to record the repayment on 1 July of 2021.
The following amortization schedule indicates the interest and principal to be repaid on an installment note established January 1,
2021, for a company with a March 31 fiscal year-end.
Period
Interest Expense on Notes Payable
$ 560
424
#TITT
286
144
1,414
1/1-12/31, Year 1
1/1-12/31, Year 2
1/1-12/31, Year 3
1/1-12/31, Year 4
Total
Beginning Notes
Payable
$ 28,000
21, 207
14, 278
Repaid Principal Ending Notes
7,210
$ 6,793
6,929
7,068
7,210
28,000
Payable
$ 21,207
14,278
7,210
Required:
1. Assuming the company makes the required annual payments on December 31, use the amortization schedule to determine (a) the
amount of the (rounded) annual payment; (b) the amount of Interest Expense to report in the year ended March 31, 2021; (c) the
amount of Interest Expense to report in the year ended March 31, 2022; (d) the Notes Payable balance at January 1, 2024; and (e)
the total interest and total principal paid over the note's entire life
2. Assuming the company makes adjustments at the end…
Chapter 9 Solutions
Intermediate Accounting: Reporting And Analysis
Ch. 9 - Prob. 1GICh. 9 - Prob. 2GICh. 9 - List the three characteristics of a liability....Ch. 9 - Prob. 4GICh. 9 - Prob. 5GICh. 9 - Prob. 6GICh. 9 - Prob. 7GICh. 9 - Prob. 8GICh. 9 - How does materiality affect the accounting for...Ch. 9 - Distinguish between an interest-bearing note and a...
Ch. 9 - Prob. 11GICh. 9 - How should long-term debt that is callable by a...Ch. 9 - Prob. 13GICh. 9 - Prob. 14GICh. 9 - Prob. 15GICh. 9 - Prob. 16GICh. 9 - Prob. 17GICh. 9 - Prob. 18GICh. 9 - Prob. 19GICh. 9 - Prob. 20GICh. 9 - Prob. 21GICh. 9 - Prob. 22GICh. 9 - Prob. 23GICh. 9 - Prob. 24GICh. 9 - Prob. 25GICh. 9 - Prob. 26GICh. 9 - Prob. 27GICh. 9 - Prob. 28GICh. 9 - The balance in Ashwood Companys accounts payable...Ch. 9 - On September 1, 2019, a company borrowed cash and...Ch. 9 - When a company receives a deposit from a customer...Ch. 9 - Bronson Apparel Inc. operates a retail store and...Ch. 9 - Prob. 5MCCh. 9 - Prob. 6MCCh. 9 - Prob. 7MCCh. 9 - Prob. 8MCCh. 9 - Prob. 9MCCh. 9 - Prob. 10MCCh. 9 - Rescue Sequences LLC purchased inventory by...Ch. 9 - Use the same information in RE9-1 except that the...Ch. 9 - Cee Co.s fiscal year begins April 1. At the...Ch. 9 - Prob. 4RECh. 9 - Prob. 5RECh. 9 - Smith Company is required to charge customers an...Ch. 9 - Wallace Corporation summarizes the following...Ch. 9 - Borat Company gives annual bonuses after the end...Ch. 9 - Prob. 9RECh. 9 - Prob. 10RECh. 9 - After years of experience, Dilcort Company...Ch. 9 - Prob. 1ECh. 9 - Notes Payable On December 1, 2019, Insto Photo...Ch. 9 - Non-Interest-Bearing Notes Payable On November 16,...Ch. 9 - Discounting of Notes Payable On October 30, 2019,...Ch. 9 - Disclosure of Debt On May 1, 2019, Ramden Company...Ch. 9 - Short-Term Debt Expected to Be Refinanced On...Ch. 9 - Short-Term Debt Expected to Be Refinanced On...Ch. 9 - Refundable Deposits Party Warehouse Inc. rents a...Ch. 9 - Prob. 9ECh. 9 - Property Taxes Family Practice Associates has an...Ch. 9 - Prob. 11ECh. 9 - Prob. 12ECh. 9 - Prob. 13ECh. 9 - Prob. 14ECh. 9 - Prob. 15ECh. 9 - Prob. 16ECh. 9 - Prob. 17ECh. 9 - Prob. 18ECh. 9 - Prob. 19ECh. 9 - Prob. 20ECh. 9 - Cash Rebates On January 1, 2020, Fro-Yo Inc. began...Ch. 9 - Prob. 22ECh. 9 - Prob. 1PCh. 9 - Notes Payable and Effective Interest On November...Ch. 9 - Trade Note Transactions Adjusto Corporation (which...Ch. 9 - Prob. 4PCh. 9 - Short-Term Debt Expected to Be Refinanced On...Ch. 9 - Non-Interest-Bearing Note Payable: Present Value...Ch. 9 - Prob. 7PCh. 9 - Prob. 8PCh. 9 - Payroll and Payroll Taxes Bailey Dry Cleaners has...Ch. 9 - Bonus Obligation and Income Tax Expense James...Ch. 9 - Prob. 11PCh. 9 - Contingencies Fallon Company, a toy manufacturer...Ch. 9 - Prob. 13PCh. 9 - Assurance-Type Warranty Clean-All Inc. sells...Ch. 9 - Prob. 15PCh. 9 - Premium Obligation Yummy Cereal Company is...Ch. 9 - Comprehensive Selected transactions of Lizard Lick...Ch. 9 - Comprehensive Selected transactions of Shadrach...Ch. 9 - Prob. 1CCh. 9 - Prob. 2CCh. 9 - Prob. 3CCh. 9 - Pending Damage Suit Disclosure On December 15,...Ch. 9 - Various Contingency Issues Skinner Company has the...Ch. 9 - Prob. 6CCh. 9 - Prob. 7CCh. 9 - Prob. 8CCh. 9 - Prob. 10C
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