Please Help:) C&Q; Marketing (CQM) recently hired a new marketing director, Jeff
ID: 2380311 • Letter: P
Question
Please Help:)
C&Q; Marketing (CQM) recently hired a new marketing director, Jeff Otos, for its main office. As part of the arrangement, CQM agreed on February 28, 2012, to advance Jeff $51,000 on a one-year, 7 percent note, with interest to be paid at maturity on February 28, 2013. CQM prepares financial statements on June 30 and December 31. Required: Prepare the journal entry that CSM will make when the note is established. (Omit the "$" sign in your response.) Prepare the journal entries that CSM will make to accrue interest on June 30 and December 31. (Round your answers to nearest whole dollar amount. Omit the "$" sign in your response.) Prepare the journal entry that CSM will make to record the interest and principal payments on February 28, 2013. (Round your answers to nearest whole dollar amount. Omit the "$" sign in your response.)Explanation / Answer
(1)
Feb 28 2012 Directors Salary A/c Dr $ 51000
To Interest Note Payable $51000
(2)
June 30 2012 Interest A/c Dr $1190
To Interest Payable A/c $1190
Dec 31 2012 Interest A/c Dr $1785
To Interest Payable A/c $1785
Working Notes: on Jun 30 2012 51000 x 7% x 4/12 = $1190
on Dec 31 2012 51000 x 7% x 6/12 = $1785
(3)
Feb 28 2013 Interest A/c Dr $595
To Interest Payable $595
Working Notes: on Feb 28 2013 51000 x 7% x 2/12 = $595
Feb 28 2013 Interest Note Payale A/c Dr $51000
Interest Payable A/c Dr $3570
To Cash A/c $54570