Zing Cell Phone Company entered into the following transactions involving current liabilities during 2020 and 2021. 2020 Mar. 14 Purchased merchandise on credit from Ferris Inc. for $160,000. The terms were 1/10, n/30 (assume a perpetual inventory system). Apr. 14 Zing paid $35,000 cash and replaced the $125,000 remaining balance of the account payable to Ferris Inc. with a 6%, 60-day note payable. May 21 Borrowed $135,000 from Scotiabank by signing a 5.5%, 90-day note. ? Paid the note to Ferris Inc. at maturity. ? Paid the note to Scotiabank at maturity. Dec. 15 Borrowed $110,000 and signed a 6.25%, 120-day note with National Bank. Dec. 31 Recorded an adjusting entry for the accrual of interest on the note to National Bank. 2021 ? Paid the note to National Bank at maturity. Required: 1. Determine the maturity dates of the three notes just described. 2. Present journal entries for each of the preceding dates. (Use 365 days an year. Do not round intermediate calculations and round the final answers to 2 decimal places.) Record the purchase of merchandise on credit 2 Record the payment of cash and a note written to extend due date. 3 Record the borrowing of cash with a 90-day against note. 4 Record the payment of note with interest. 5 Record the payment of note with interest. 6 Record the borrowing of cash with a 120-day note. 7 Record the accrued interest on note payable. 8 Record the payment of note with interest.
Zing Cell Phone Company entered into the following transactions involving current liabilities during 2020 and 2021. 2020 Mar. 14 Purchased merchandise on credit from Ferris Inc. for $160,000. The terms were 1/10, n/30 (assume a perpetual inventory system). Apr. 14 Zing paid $35,000 cash and replaced the $125,000 remaining balance of the account payable to Ferris Inc. with a 6%, 60-day note payable. May 21 Borrowed $135,000 from Scotiabank by signing a 5.5%, 90-day note. ? Paid the note to Ferris Inc. at maturity. ? Paid the note to Scotiabank at maturity. Dec. 15 Borrowed $110,000 and signed a 6.25%, 120-day note with National Bank. Dec. 31 Recorded an adjusting entry for the accrual of interest on the note to National Bank. 2021 ? Paid the note to National Bank at maturity. Required: 1. Determine the maturity dates of the three notes just described. 2. Present journal entries for each of the preceding dates. (Use 365 days an year. Do not round intermediate calculations and round the final answers to 2 decimal places.) Record the purchase of merchandise on credit 2 Record the payment of cash and a note written to extend due date. 3 Record the borrowing of cash with a 90-day against note. 4 Record the payment of note with interest. 5 Record the payment of note with interest. 6 Record the borrowing of cash with a 120-day note. 7 Record the accrued interest on note payable. 8 Record the payment of note with interest.
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 14EB: Anderson Air is a customer of Handler Cleaning Operations. For Anderson Airs latest purchase on...
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Question
Zing Cell Phone Company entered into the following transactions involving current liabilities during 2020 and 2021.
2020 | ||
Mar. | 14 | Purchased merchandise on credit from Ferris Inc. for $160,000. The terms were 1/10, n/30 (assume a perpetual inventory system). |
Apr. | 14 | Zing paid $35,000 cash and replaced the $125,000 remaining balance of the account payable to Ferris Inc. with a 6%, 60-day note payable. |
May | 21 | Borrowed $135,000 from Scotiabank by signing a 5.5%, 90-day note. |
? | Paid the note to Ferris Inc. at maturity. | |
? | Paid the note to Scotiabank at maturity. | |
Dec. | 15 | Borrowed $110,000 and signed a 6.25%, 120-day note with National Bank. |
Dec. | 31 | Recorded an |
2021 | ||
? | Paid the note to National Bank at maturity. |
Required:
1. Determine the maturity dates of the three notes just described.
2. Present
-
Record the purchase of merchandise on credit
-
2Record the payment of cash and a note written to extend due date.
-
3Record the borrowing of cash with a 90-day against note.
-
4Record the payment of note with interest.
-
5Record the payment of note with interest.
-
6Record the borrowing of cash with a 120-day note.
-
7Record the accrued interest on note payable.
-
8Record the payment of note with interest.
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