continued Journal entries a 412010 Dr Note Receivable 6000 Cr Accounts

Continued journal entries a 412010 dr note receivable

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(continued) Journal entries: a. 4/1/2010 Dr. Note Receivable ........... ........... ........... ........... ........... ……… 6,000 Cr. Accounts Receivable ........... ........... ........... ........... ……… 6,000 b. c. 12/31/2010 Dr. Interest Receivable ........ ........... ........... ........... ........... ........... 675 Cr. Interest Revenue ($6,000 * 15% * 9/12) .... ........... ........... 675 3/31/2011 Dr. Cash ...... ........... ........... ........... ........... ........... ........... ........... 6,900 Cr. Note Receivable ..... ........... ........... ........... ........... ........... 6,000 Cr. Interest Receivable . ........... ........... ........... ........... ……… 675 Cr. Interest Revenue ..... ........... ........... ........... ........... ........... 225 In entry c , only $675 of the total interest of $900 had been accrued, so the Interest Receivable account is reduced by the $675 that had been accrued in 2010; the other $225 that is received is recorded as interest revenue for 2011, the year in which it was earned. E4.12. Balance Sheet Income Statement . Assets = Liabilities + Owners’ Equity ° Net income = Revenues - Expenses a. b. c. Converted account payable to a note payable on February 1: Accounts Payable -16,800 Note Payable +16,800 Accrued interest expense for February and March ($16,400 * 7% * 2/12) Interest Payable Interest +196 Expense -196 Paid note and accrued interest, including interest for April and May, on May 31: Cash Note Payable Interest -17,192 -16,800 Expense Interest Payable -196 -196 Verspreiden niet toegestaan | Gedownload door Jordevie Uvs ([email protected]) lOMoARcPSD
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Chapter 04 The Bookkeeping Process and Transaction Analysis 4-18 E4.12. (continued) Journal entries: a. b. February 1 Dr. Accounts Payable .......... ........... ........... ........... ........... ........... 16,800 Cr. Note Payable ......... ........... ........... ........... ........... ........... 16,800 March 31 Dr. Interest Expense ........... ........... ........... ........... ........... ........... 196 Cr. Interest Payable ($16,800 * 7% * 2/12) ..... ........... ........... 196 c. May 31 Dr. Interest Expense ........... ........... ........... ........... ........... ……… 196 Dr. Interest Payable ........... ........... ........... ........... ........... ……… 196 Dr. Note Payable .... ........... ........... ........... ........... ........... ........... 16,800 Cr. Cash .......... ........... ........... ........... ........... ........... ........... 17,192 E4.13. a. b. c. d. Net income for October would be overstated, because an expense was not recorded. Net income for November would be understated, because November expenses would include an expense from October. There wouldn't be any effect on net income for the two months combined, because the overstatement and understatement offset. To match revenues and expenses, which results in more accurate financial statements. E4.14. Retained Net Income Earnings Amounts before adjustment .. ........... ........... ........... ........... $47,400 $182,000 Revenue increase adjustment ........... ........... ........... ........... 10,000 10,000 Expense increase adjustment. ........... ........... ........... ........... (16,800) (16,800) Amounts after adjustment ..... ........... ........... ........... ........... $ 40,600 $175,200 Verspreiden niet toegestaan | Gedownload door Jordevie Uvs ([email protected]) lOMoARcPSD
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Chapter 04 The Bookkeeping Process and Transaction Analysis 4-19 E4.15. a. b. c. d. $1,200 + ? - $1,500 = $2,100. Thus, the February 28 adjustment = $2,400 The Cash account would most likely have been credited for the amount of the February transactions, and would represent the payment of previously accrued interest. The Interest Expense account would most likely have been debited for the February adjustment, and would represent the accrual of interest expense for February. The entry would have been made to make the income statement and balance sheet more accurate. The adjustment resulted in a better matching of revenue and expense for February. E4.16. a. Accounts Receivable Beginning balance 5,400 Collections from Sales revenue for month 30,000 customers during month ? Ending balance 2,200 Solution: $5,400 + $30,000 - ? = $2,200 Cash collected from customers during month = $33,200 Balance Sheet Income Statement .
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