8. ABC Co. paid XYZ Co. $2,000 for merchandise with a 60-day, 12% note dated October 31st. If ABC pays off the note at maturity, what entry should XYZ make on its books at that time? A. Cash 2,040 Notes Receivable 2,040 B. Notes Payable 2,000 Interest Expense 40 Cash 2,040 C. Cash 2,040 Notes Receivable 2,000 Interest Revenue 40 D. Cash 2,240 Notes Receivable 2,000 Interest Revenue 240

8. ABC Co. paid XYZ Co. $2,000 for merchandise with a 60-day, 12% note dated October 31st. If ABC pays off the note at maturity, what entry should XYZ make on its books at that time? A. Cash 2,040 Notes Receivable 2,040 B. Notes Payable 2,000 Interest Expense 40 Cash 2,040 C. Cash 2,040 Notes Receivable 2,000 Interest Revenue 40 D. Cash 2,240 Notes Receivable 2,000 Interest Revenue 240

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 22MC: A company collects an honored note with a maturity date of 24 months from establishment, a 10%...

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A company collects an honored note with a maturity date of 24 months from establishment, a 10% interest rate, and an initial loan amount of $30,000. Which accounts are used to record collection of the honored note at maturity date? A. Interest Revenue, Interest Expense, Cash B. Interest Receivable, Cash, Notes Receivable C. Interest Revenue, Interest Receivable, Cash, Notes Receivable D. Notes Receivable, Interest Revenue, Cash, Interest Expense
On June 1, Phillips Corporation sold, with recourse, a note receivable from a customer to a bank. The note has a face value of 15,000 and a maturity value (principal plus interest) of 15,400. The discount is calculated to be 385, and the accrued interest income is 100. The recourse liability is estimated to be 1,000. Prepare the journal entry of Phillips to record the sale of the note receivable.
Roberti Company paid Hoffman Company for merchandise with a $8,000, 60-day, 9% note dated April 1. If Roberti Company pays the note at maturity, what entry should Hoffman make at that time? Select one: OA. Cash OB. Notes payable Interest expense Cash Cash Interest income Notes receivable O D. Interest income Notes receivable Notes payable Interest expense Cash 8,720 8,000 720 8,120 7,880 120 720 8,000 8,720 120 8,000 8,000
C company discounted its own 250,000 one year note at a bank, at a discount rate of 12% when the prime rate was 10%. In reporting the note in the Statement of Financial Position prior to maturity, 1.what rate should C company use for the recording of interest expense? 2. The journal entry to record the transaction will include a a. Debit to Cash for 250,000 b. Debit to Cash for 220,000 c. Debit to discount on notes payable, 40,000 d. Credit to notes payable, 220,000
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The Beta Company made a sale for $340,000 on credit. It accepted a note receivable from the customer, payabl years. A 4% interest is due from the customer every December 31st. The customer's borrowing rate is 6%. The i revenue to be recorded on the note receivable at the end of the first year is (ignore decimals in your calculations Select one: a. $19,309 Ob. $12,872 c. $13,600 X d. $22,808
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1. Sunshine Inc. assigns P1,500,000 of its accounts receivables as collateral for a P1,000,000 loan with a bank. The bank assesses a 3% finance fee and charges interest on the note at 6%. The journal entry to record this transaction would not include a a. Debit to cash for P970,000 b. Debit to finance charge for P30,000 c. Credit to notes payable for P1,000,000 d. Credit to accounts receivable for P1,000,000 Numbers 2-3 Janine Company factored P5,000,000 of accounts receivable. Control was surrendered by the entity. The finance company assessed a fee of 2% and retains a holdback equal to 10% of the accounts receivable. In addition, the finance company charged 12% interest computed on a weighted average time to maturity of the accounts receivable for 30 days? 2. What is the amount initially received from the factoring of accounts receivable? a. 4,250,000 b. 4,200,000 c. 4,700,685 d. 4,200,685 3. What total amount should be recognized as loss on factoring? a. 299,315 b. 799,315 c.…