Intermediate Accounting with British Airways Annual Report + Connect Plus

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C-Homework #2 zrv Blanton Plastics, a household plastic product manufacturer, borrowed $14 million cash on October 1, 2011, to provide working capital for year-end production. Blanton issued a four-month, 12% promissory note to L&T Bank under a prearranged short-term line of credit. Interest on the note was payable at maturity. Each firm’s fiscal period is the calendar year. Required: (1) Prepare the journal entries to record (a) the issuance of the note by Blanton Plastics and (b) L&T Bank’s receivable on October 1, 2011. (Enter your answers in dollars not in millions. Omit the "$" sign in your response.) General Journal Debit Credit Blanton Plastics Cash 14,000,000 Notes payable 14,000,000 L & T Bank Notes receivable 14,000,000 Cash 14,000,000 (2) Prepare the journal entries by both firms to record all subsequent events related to the note through January 31, 2012. (Do not round intermediate calculations. Enter your answers in dollars not in millions. Omit the "$" sign in your response.) General Journal Debit Credit Adjusting entries (December 31, 2011) Blanton Plastics Interest expense 420,000 Interest payable 420,000 L & T Bank Interest receivable 420,000 Interest revenue 420,000 Maturity (January 31, 2012) Blanton Plastics Interest expense 140,000 Interest payable 420,000 Notes payable 14,000,0 Cash 14,560,000 L & T Bank Cash 14,560,000 Interest receivable 420,000 Interest revenue 140,000 Notes receivable 14,000,0 Suppose the face amount of the note was adjusted to include interest (a noninterest-bearing note) and 12% is the bank’s stated discount rate.
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C-Homework #2 zrv (3-a) Prepare the journal entries to record the issuance of the noninterest-bearing note by Blanton Plastics on October 1, 2011, the adjusting entry at December 31, and payment of the note at maturity. (Do not round intermediate calculations. Enter your answers in dollars not in millions. Omit the "$" sign in your response.) General Journal Debit Credit Issuance of note (October 1, 2011) Cash 13,440,0 Discount on notes payable 560,000 Notes payable 14,000,000 Adjusting entry (December 31, 2011) Interest expense 420,000 Discount on notes payable 420,000 Maturity (January 31, 2012) Interest expense 140,000 Discount on notes payable 140,000 Notes payable 14,000,000 Cash 14,000,000 (3-b) What would be the effective interest rate? (Round your answer to 1 decimal place. Omit the "%" sign in your response.) Annual effective rate 12.5 % Camden Biotechnology began operations in September 2011. The following selected transactions relate to liabilities of the company for September 2011 through March 2012. Camden’s fiscal year ends on December 31. Its financial statements are issued in April. 2011
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Asignacion 2 - Blanton Plastics, a household plastic...

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