Warr22e_IM_TM_Ch11 - Transparency Master 11-1 WHAT DO THESE...

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Transparency Master 11-1 WHAT DO THESE ACCOUNTS HAVE IN COMMON? Accounts Payable Interest Payable Unearned Rent Wages Payable Taxes Payable
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Transparency Master 11-2 JOURNAL ENTRIES TO RECORD A PROMISSORY NOTE The following transactions occurred between Spoke Company (the seller) and Bryden Company (the buyer). Apr. 19 Spoke Co. sold $80,000 in merchandise to Bryden Co. on account, with terms n/30. May 19 Spoke Co. granted Bryden Co. a 90-day ex- tension on the account receivable. Bryden Co. signed an $80,000, 10%, 90-day note as evidence of the time extension. Aug. 17 Bryden Co. paid Spoke Co. the amount due on the note. 1. Prepare the journal entries used by Spoke Com- pany to record the sale and the note receivable. Assume that the cost of the merchandise sold to Bryden Company was $50,000. 2. Prepare the journal entries used by Bryden Com- pany to record the purchase and the note payable.
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Transparency Master 11-3 JOURNAL ENTRIES TO RECORD A PROMISSORY NOTE Solution 1. Spoke Co. Apr. 19 Accounts Receivable—Bryden Co. . 80,000 Sales. .............................................. 80,000 Apr. 19 Cost of Merchandise Sold. ............... 50,000 Merchandise Inventory. ................ 50,000 May 19 Notes Receivable. .............................. 80,000 Accounts Receivable—Bryden Co. 80,000 Aug. 17 Cash. ................................................... 82,000 Notes Receivable. .......................... 80,000 Interest Revenue. .......................... 2,000 2. Bryden Co. Apr. 10 Merchandise Inventory. .................... 80,000 Accounts Payable—Spoke Co. .... 80,000 May 19 Accounts Payable—Spoke Co. ........ 80,000 Notes Payable. ............................... 80,000 Aug. 17 Notes Payable. ................................... 80,000 Interest Expense. ............................... 2,000
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Cash. ............................................... 82,000
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Transparency Master 11-4 WRITING EXERCISE Would you rather borrow $10,000 by issuing (a) a 90-day, 15% note or (b) a 90-day, non- interest-bearing note discounted at 15%?
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Transparency Master 11-5 CALCULATION OF NET PAY Blake Edwards is single. He claims one
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This note was uploaded on 04/20/2010 for the course BUSINESS Accounting taught by Professor Ebiohuche during the Spring '10 term at DeVry Manhattan.

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Warr22e_IM_TM_Ch11 - Transparency Master 11-1 WHAT DO THESE...

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