Please show your work so it is easier to understand, thank you! EXAMPLES : On No
ID: 2528825 • Letter: P
Question
Please show your work so it is easier to understand, thank you!
EXAMPLES:
On November 15, 2016, Casey's Snowboards settled a past due account with Winter Sports Equipment. Casey's Snowboards made a $3,000 payment and signed a $12,000, 90-day, 5% note payable to cover the balance. (Especially pay attention to End-of-Period Interest Adjustment) a) What is the maturity date of the note? b) What is the total amount of the interest due at maturity? c) Record the entry that Casey's Snowboards makes when the note is issued. d) Record the year end adjusting entry that Casey's Snowboards makes for this outstanding note. (December 31 year end) e) Record the payment of the note by Casey's Snowboards at maturity.Please show your work so it is easier to understand, thank you!
EXAMPLES:
Oct. 3 Unearned Ticket Revenue 625,000 625,000 Record concert ticket revenues earned, a$5,000,000 × 1/ 8Explanation / Answer
Solution:
a. The maturity date of the note is 90 days.
b. Interest Expense = $12,000 × 5% × (60 ÷ 360) = $100
c.
Accounts Payable $12,000
Notes Payable $12,000
d. Notes payable ......................... $12,000
Interest expense ..............................$3,000
Cash .......................................................$15,000
e.
Notes Payable $12,000
Interest Payable $3,000
Interest Expense ($12,000 × 5% × (30 ÷ 360) $50
Cash $15,050