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Homework answers / question archive / Question 1) On December 1, Destin Corporation borrowed RM50,000 on a 90-day, 6% note
Question 1) On December 1, Destin Corporation borrowed RM50,000 on a 90-day, 6% note. Prepare the entries to record the issuance of the note, the accrual of interest at year end, and the payment of the note
Question 2 During December 2016, Fashion Valley Publishing sold 2,500 12-month annual magazine subscriptions at a rate of RM30 each. The first issues were mailed in January 2013. Prepare the entries on Fashion Valley's books to record the sale of the subscriptions and the mailing of the first issues.
Question 3 Landen Company had cash sales of RM54,166 (including taxes) for the month of June. Sales are subject to 6% sales tax. Prepare the entry to record the sale.
Answer 1):
|
Date |
Particulars |
Debit |
Credit |
|
Dec-01 |
Cash |
50,000 |
|
|
Notes payable |
50,000 |
||
|
Dec-31 |
Interest Expense |
250 |
|
|
Interest Payable |
250 |
||
|
(50,000*6%*30/360) |
|||
|
Mar-01 |
Interest Expense (50,000*6%*60/360) |
500 |
|
|
Interest Payable (50,000*6%*30/360) |
250 |
||
|
Notes payable |
50,000 |
||
|
Cash |
50,750 |
?
2)
|
Date |
Particulars |
Debit |
Credit |
|
Dec-16 |
Cash |
75,000 |
|
|
Unearned Revenue |
75,000 |
||
|
(2,500 * $30 = $75,000) |
|||
|
Jan-17 |
Unearned Revenue |
6,250 |
|
|
Subscription Revenue |
6,250 |
||
|
(75000 / 12 = 6,250) |
?
3)
|
Particulars |
Debit |
Credit |
|
Cash |
54,166 |
|
|
Sales Revenue |
51,100 |
|
|
Sales Tax Payable |
3,066 |
?
