{"id":27674,"date":"2022-01-25T14:55:55","date_gmt":"2022-01-25T14:55:55","guid":{"rendered":"https:\/\/assignmenttutors.net\/blog\/problem-10-3b-accounting-homework-help\/"},"modified":"2022-01-25T14:55:55","modified_gmt":"2022-01-25T14:55:55","slug":"problem-10-3b-accounting-homework-help","status":"publish","type":"post","link":"https:\/\/assignmenttutors.net\/blog\/problem-10-3b-accounting-homework-help\/","title":{"rendered":"Problem 10.3b | Accounting homework help"},"content":{"rendered":"
\n\n

PROBLEM 10.3B<\/span><\/strong><\/p>\n

Notes Payable: Accruing Interest<\/span><\/p>\n<\/td>\n\n

During the fiscal year ended December 31, Swanlee Corporation engaged in the following transactions involving notes payable:<\/span><\/p>\n\n\n\n\n\n\n\n\n
\n

July 1<\/span><\/strong><\/p>\n<\/td>\n

\n

Borrowed $20,000 from Weston Bank, signing a 90-day, 12 percent note payable.<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Sept. 16<\/span><\/strong><\/p>\n<\/td>\n

\n

Purchased office equipment from Moontime Equipment. The invoice amount was $30,000, and Moontime agreed to accept, as full payment, a 10 percent, three-month note for the invoice amount.<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Oct. 1<\/span><\/strong><\/p>\n<\/td>\n

\n

Paid Weston Bank the note plus accrued interest.<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Dec. 1<\/span><\/strong><\/p>\n<\/td>\n

\n

Borrowed $170,000 from Jean Jones, a major corporate stockholder. The corporation issued a $170,000, 5 percent, 120-day note payable.<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Dec. 1<\/span><\/strong><\/p>\n<\/td>\n

\n

Purchased merchandise inventory in the amount of $10,000 from Listen Corporation. Listen accepted a 90-day, 12 percent note as a full settlement of the purchase. Swanlee Corporation uses a perpetual inventory system.<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Dec. 16<\/span><\/strong><\/p>\n<\/td>\n

\n

The $30,000 note payable to Moontime Equipment matured today. Swanlee paid the accrued interest on this note and issued a new 60-day, 12 percent note payable in the amount of $30,000 to replace the note that matured.<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Instructions<\/span><\/strong><\/p>\n

    \n
  1. Prepare journal entries (in general journal form) to record the above transactions. Use a 360-day year in making the interest calculations.<\/span><\/li>\n
  2. Prepare the adjusting entry needed at December 31, prior to closing the accounts. Use one entry for all three notes (round to the nearest dollar).<\/span><\/li>\n
  3. Provide a possible explanation why the new 60-day note payable to Moontime Equipment pays 16 percent interest instead of the 10 percent rate charged on the September 16 note.<\/span><\/li>\n<\/ol>\n<\/td>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

    PROBLEM 10.3B Notes Payable: Accruing Interest During the fiscal year ended December 31, Swanlee Corporation engaged in the following transactions involving notes payable: July 1 Borrowed $20,000 from Weston Bank, signing a 90-day, 12 percent note payable. Sept. 16 Purchased office equipment from Moontime Equipment. The invoice amount was $30,000, and Moontime agreed to accept, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16],"tags":[],"class_list":["post-27674","post","type-post","status-publish","format-standard","hentry","category-education"],"_links":{"self":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/27674","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/comments?post=27674"}],"version-history":[{"count":0,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/27674\/revisions"}],"wp:attachment":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/media?parent=27674"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/categories?post=27674"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/tags?post=27674"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}