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Record note payable and interest

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Reference no: EM132482260

Question 1: Record note payable and interest.

Udala Uke's had the following transactions involving notes payable.

July 1, 2017 Borrows $50,000 from First National Bank by signing a nine-month, 8% note.

Nov. 1, 2017 Borrows $60,000 from Interprovincial Bank by signing a three-month, 6% note.

Dec. 31, 2017 Make adjusting entries.

Feb. 1, 2018 Pays principal and interest to Interprovincial Bank.

Apr. 1, 2018 Pays principal and interest to First National Bank.

Instructions Make journal entries for each of the transactions.

Question 2: Record note payable, interest paid monthly.

  • On June 1, 2017, Novack Company purchases equipment on account from Moleski Manufacturers for $50,000. Novack is unable to pay its account on July 1, 2017, so Moleski agrees to accept a three-month, 7% note payable from Novack. Interest is payable the first of each month, starting August 1, 2017. Moleski has an August 31 fiscal year end and adjusts its accounts on an annual basis.

Instructions

Question 3: Record all transactions related to the note for Novack Company.

Question 4: Record note payable and note receivable; interest paid at maturity.

  • On March 1, 2017, Tundra Trees purchased equipment from Edworthy Equipment Dealership in exchange for a seven-month, 8%, $30,000 note payable. Interest is due at maturity. Tundra Trees has a July 31 fiscal year end. Edworthy has a May 31 fiscal year end. Both companies adjust their accounts annually. Tundra honours the note at maturity.

Instructions

Question 5(a) For Tundra Trees, record all transactions related to the note.

Question 5 (b) For Edworthy Equipment, record all transactions related to the note. Assume the cost of the equipment to Edworthy was $18,000. Record sales taxes.

In providing accounting services to small businesses, you encounter the following independent situations:

1.Sainsbury rang up $13,200 of sales, plus HST of 13%, on its cash register on April 10.

2.Montgomery rang up $30,000 of sales, before sales taxes, on its cash register on April 21. The company charges 5% GST and no PST.

3.Winslow charges 5% GST and 7% PST on all sales. On April 27, the company collected $25,100 sales in cash plus sales taxes.

Instructions

Question 6: Record the sales transactions and related taxes for each client.

Question 7: Record sales taxes.

  • Scoggin rings up sales plus sales taxes on its cash register. On April 10, the register total for sales is $80,000.

Instructions

Question 8: Journalize the transactions assuming the sales were made in

(a) Quebec,

(b) Nova Scotia, and

(c) Alberta.

Account for unearned revenue.

  • Charleswood Musical Theatre's season begins in November and ends in April, with a different play each month. In October 2017, Charleswood sold 100 season tickets for the 2017-18 season, for $210 each. Charleswood records all season ticket sales as unearned revenue and adjusts its accounts on a monthly basis. The company has a March 31 fiscal year end.

Instructions

Question 9 (a) Make the entry for sale of the season tickets. Date the entry October 31.

Question 9 (b) Make any required adjusting entries on:

1.November 30, 2017
2.March 31, 2018
3.April 30, 2018

Question 9(c) Determine the balance (after any required adjustments) in Unearned Revenue on:

1.November 30, 2017
2.December 31, 2017
3.March 31, 2018

  1. Account for unearned revenue.
  • Satterfield publishes a monthly sports magazine, Hockey Hits. Subscriptions to the magazine cost $18 per year. During November 2017, Satterfield sells 15,000 subscriptions beginning with the December issue. Satterfield makes financial statements quarterly and recognizes revenue earned at the end of the quarter. The company uses the accounts Unearned Revenue and Revenue.

Instructions

Question 10(a) Make the entry in November for the receipt of the subscriptions.

Question 10(b) Make the adjusting entry at December 31, 2017, to record revenue earned in December 2017.

Question 10(c) Make the adjusting entry at March 31, 2018, to record revenue earned in the first quarter of 2018.

Reference no: EM132482260

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