Sagar Jack Hammer Company completed the following transactions. The annual accounting period ends December 31.Apr. 30 Received $600,000 from Commerce Bank after signing a twelve-month, 6 percent, promissory noteJune 6 Purchased merchandise on account at a cost of $75,000 (Assume a perpetual inventory system.)July 15 Paid for the June 6 purchaseAug. 31 Signed a contract to provide security services to a small apartment complex and collected six months' fees in advance,amounting to $24,000 (Use an account called Deferred Revenue.)Dec. 31 Determined salary and wages of $40,000 were earned but not yet paid as of December 31 (ignore payroll taxes)Dec. 31 Adjusted the accounts at year-end, relating to interestDec. 31 Adjusted the accounts at year-end, relating to security servicesRequired:1. Prepare journal entries for each of the transactions. (If no entry is required for a transaction/event, select "No journal entryrequired" in the first account field.)View transaction listJournal entry worksheet123 4Received $600,000 from Commerce Bank after signing a twelve-month, 6percent, promissory note.Note: Enter debits before credits.DateApr 30General JournalDebitCreditRecord entryClear entryView general journal

DATENOTESApril 30Simply debit cash then credit notes payable for the amount received, $600,000.June…

Answered: Jack Hammer Company completed the…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 8PA: Serene Company purchases fountains for its inventory from Kirkland Inc. The following transactions...

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On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan.
Review the following transactions and prepare any necessary journal entries for Lands Inc. A. On December 10, Lands Inc. contracts with a supplier to purchase 450 plants for its merchandise inventory, on credit, for $12.50 each. Credit terms are 4/15, n/30 from the invoice date of December 10. B. On December 28, Lands pays the amount due in cash to the supplier.
On June 1, Phillips Corporation sold, with recourse, a note receivable from a customer to a bank. The note has a face value of 15,000 and a maturity value (principal plus interest) of 15,400. The discount is calculated to be 385, and the accrued interest income is 100. The recourse liability is estimated to be 1,000. Prepare the journal entry of Phillips to record the sale of the note receivable.
Air Compressors Inc. purchases compressor parts for its inventory from a supplier. The following transactions take place during the current year: A. On April 5, the company purchases 400 parts for $8.30 per part, on credit. Terms of the purchase are 4/ 10, n/30, invoice dated April 5. B. On May 5, Air Compressors does not pay the amount due and renegotiates with the supplier. The supplier agrees to $400 cash immediately as partial payment on note payable due, converting the debt owed into a short-term note, with a 7% annual interest rate, payable in three months from May 5. C. On August 5, Air Compressors pays its account in full. Record the journal entries to recognize the initial purchase, the conversion plus cash, and the payment.
Serene Company purchases fountains for its inventory from Kirkland Inc. The following transactions take place during the current year. A. On July 3, the company purchases thirty fountains for $1,200 per fountain, on credit. Terms of the purchase are 2/10, n/30, invoice dated July 3. B. On August 3, Serene does not pay the amount due and renegotiates with Kirkland. Kirkland agrees to convert the debt owed into a short-term note, with an 8% annual interest rate, payable in two months from August 3. C. On October 3, Serene Company pays its account in full. Record the journal entries to recognize the initial purchase, the conversion, and the payment.
Window World extended credit to customer Nile Jenkins in the amount of $130,900 for his purchase of window treatments on April 2. Terms of the sale are 2/60, n/150. The cost of the purchase to Window World is $56,200. On September 4, Window World determined that Nile Jenkinss account was uncollectible and wrote off the debt. On December 3, Mr. Jenkins unexpectedly paid in full on his account. Record each Window World transaction with Nile Jenkins. In order to demonstrate the write-off and then subsequent collection of an account receivable, assume in this example that Window World rarely extends credit directly, so this transaction is permitted to use the direct write-off method. Remember, however, that in most cases the direct write-off method is not allowed.
Laminate Express extended credit to customer Amal Sunderland in the amount of $244,650 for his January 4 purchase of flooring. Terms of the sale are 2/30, n/120. The cost of the purchase to Laminate Express is $88,440. On April 5, Laminate Express determined that Amal Sunderlands account was uncollectible and wrote off the debt. On June 22, Amal Sunderland unexpectedly paid 30% of the total amount due in cash on his account. Record each Laminate Express transaction with Amal Sunderland. In order to demonstrate the write-off and then subsequent collection of an account receivable, assume in this example that Laminate Express rarely extends credit directly, so this transaction is permitted to use the direct write-off method. Remember, though, that in most cases the direct write-off method is not allowed.
Jack Hammer Company completed the following transactions. The annual accounting period ends December 31. Apr. 30 Received $465,000 from Commerce Bank after signing a 12-month, 7 percent, promissory note. June 6 Purchased merchandise on account at a cost of $66,000. (Assume a perpetual inventory system.) July 15 Paid for the June 6 purchase. Aug. 31 Signed a contract to provide security service to a small apartment complex starting in September, and collected six months' fees in advance amounting to $18,600. Dec. 31 Determined salary and wages of $31,000 were earned but not yet paid as of December 31 (ignore payroll taxes). Dec. 31 Adjusted the accounts at year-end, relating to interest. Dec. 31 Adjusted the accounts at year-end, relating to security service. Required: 1. & 2. Make journal entries for each of the transactions through August 31 and adjusting entries required on December 31. 3. Show how all of the liabilities arising from these items are reported on the balance sheet…
Jack Hammer Company completed the following transactions. The annual accounting period ends December 31. Apr. 30 Received $600,000 from Commerce Bank after signing a 12-month, 6 percent, promissory note. June 6 Purchased merchandise on account at a cost of $75,000. (Assume a perpetual inventory system.) July 15 Paid for the June 6 purchase. Aug. 31 Signed a contract to provide security service to a small apartment complex starting in September, and collected six months’ fees in advance, amounting to $24,000. Dec. 31 Determined salary and wages of $40,000 were earned but not yet paid as of December 31 (ignore payroll taxes). Dec. 31 Adjusted the accounts at year-end, relating to interest. Dec. 31 Adjusted the accounts at year-end, relating to security service. Required: For each listed transaction and related adjusting entry, indicate the accounts, amounts, and effects on the accounting equation. For each item, indicate whether the debt-to-assets ratio is increased or decreased or there…
Jack Hammer Company completed the following transactions. The annual accounting period ends December 31. Apr. 30 Received $672,000 from Commerce Bank after signing a 12-month, 9.00 percent, promissory note. June 6 Purchased merchandise on account at a cost of $81,000. (Assume a perpetual inventory system.) July 15 Paid for the June 6 purchase. Aug. 31 Signed a contract to provide security service to a small apartment complex starting in September, and collected six months' fees in advance, amounting to $27,000. Dec. 31 Determined salary and wages of $46,000 were earned but not yet paid as of December 31 (ignore payroll taxes). Dec. 31 Adjusted the accounts at year-end, relating to interest. Dec. 31 Adjusted the accounts at year-end, relating to security service. Required: For each listed transaction and related adjusting entry, indicate the accounts, amounts, and effects on the accounting equation. For each item, indicate whether the debt-to-assets ratio is increased or decreased…
Jack Hammer Company completed the following transactions. The annual accounting period ends December 31. April 30 Received $672,000 from Commerce Bank after signing a 12-month, 9.00 percent, promissory note. June 6 Purchased merchandise on account at a cost of $81,000. (Assume a perpetual inventory system.) July 15 Paid for the June 6 purchase. August 31 Signed a contract to provide security service to a small apartment complex starting in September, and collected six months' fees in advance, amounting to $27,000. December 31 Determined salary and wages of $46,000 were earned but not yet paid as of December 31 (ignore payroll taxes). December 31 Adjusted the accounts at year-end, relating to interest. December 31 Adjusted the accounts at year-end, relating to security service. Required: 1. For each listed transaction and related adjusting entry, indicate the accounts, amounts, and effects on the accounting equation. 2. For each item, indicate whether the debt-to-assets ratio is…
Vigeland Company completed the following transactions during Year 1. Vigeland’s fiscal year ends on December 31. January 15 Purchased and paid for merchandise. The invoice amount was $15,200; assume a perpetual inventory system. April 1 Borrowed $774,000 from Summit Bank for general use; signed a 10-month, 9% annual interest-bearing note for the money. June 14 Received a $24,000 customer deposit for services to be performed in the future. July 15 Performed $3,450 of the services paid for on June 14. December 12 Received electric bill for $26,160. Vigeland plans to pay the bill in early January. December 31 Determined wages of $15,000 were earned but not yet paid on December 31 (disregard payroll taxes). Required: Prepare journal entries for each of these transactions. Prepare the adjusting entries required on December 31.

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