On August 1, Handley Ltd. accepted a $25,200 note from Borges Ltd. in settlement of an account receivable. The note bears interest of 6% and both principal and interest are due in two months, on October 1. Interest on the note was accrued on August 31 and on September 30. On October 1, Borges paid the note, including the accrued interest. Prepare the journal entries required to record the above transactions. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O for the amounts)

On August 1, Handley Ltd. accepted a $25,200 note from Borges Ltd. in settlement of an account receivable. The note bears interest of 6% and both principal and interest are due in two months, on October 1. Interest on the note was accrued on August 31 and on September 30. On October 1, Borges paid the note, including the accrued interest. Prepare the journal entries required to record the above transactions. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O for the amounts)

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 December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan. Refer to RE6-10. On December 31, Jordan Inc. received 50,000 on assigned accounts. Prepare Jordans journal entries to record the cash receipt and the payment to McLaughlin.
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.
A customer was unable to pay the accounts receivable on time in the amount of $34,000. The customer was able to negotiate with the company and transferred the accounts receivable into a note that includes interest, along with an up-front cash payment of $6,000. The note maturity date is 24 months with a 15% annual interest rate. What is the entry to recognize this transfer?
Lundquist Company received a 60-day, 7% note for $79,000, dated July 23, from a customer on account. Required: a. Determine the due date of the note. b. Determine the maturity value of the note. Assume 360 days in a year. c. Journalize the entry to record the receipt of the payment of the note at maturity. Refer to the Chart of Accounts for exact wording of account titles.
On August 1, Sweetwater Ltd. accepted a $28,400 note from Borges Ltd. in settlement of an account receivable. The note bears interest of 6% and both principal and interest are due in two months, on October 1. Interest on the note was accrued on August 31 and on September 30. On October 1, Borges paid the note, including the accrued interest. Prepare the journal entries required to record the above transactions. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)
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