HW_8 Current Liabilities with solution

HW_8 Current Liabilities with solution - Homework #8:...

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Homework #8: Current Liabilities (Ch 13), due on April 7. Problem 1: Ontario Resources, a natural energy supplier, borrowed $80 million cash on November 1, 2011, to fund a geological survey. The loan was made by Quebec Banque under a short-term credit line. Ontario Resources issued a 9-month, 12% promissory note with interest payable at maturity. Ontario Resources' fiscal period is the calendar year. Required: (1.) Prepare the journal entry for the issuance of the note by Ontario Resources. (2.) Prepare the appropriate adjusting entry for the note by Ontario Resources on December 31, 2011. Show calculations. (3.) Prepare the journal entry for the payment of the note at maturity. Show calculations. Solution to Problem 1:
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Problem 2: Dos Passos Company sells televisions at an average price of $ 900 and also offers to each customer a separate 3-year warranty contract for $90 that requires the company to perform periodic services and to replace defective parts. During2010, the company sold 300 televisions and 270 warranty contracts for cash. It estimates the 3-year warranty costs as $20 for parts and $40 for labor and accounts for warranties separately. Assume sales occurred on Dec 31, 2010,
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This note was uploaded on 02/22/2012 for the course ACCT 401 taught by Professor Winchel during the Spring '10 term at South Carolina.

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HW_8 Current Liabilities with solution - Homework #8:...

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