On December 31, 2011 Berry Corporation sold some of its product to Flynn Company, accepting a 3%,...
Question:
On December 31, 2011 Berry Corporation sold some of its product to Flynn Company, accepting a 3%, four-year promissory note having a maturity value of $500,000 (interest payable annually on December 31). Berry Corporation pays 6% for its borrowed funds. Flynn Company, however, pays 8% for its borrowed funds. The product sold is carried on the books of Berry at a manufactured cost of $310,000. Assume Berry uses a perpetual inventory system.
Instructions:
(a) Prepare the journal entries to record the transaction on the books of Berry Corporation at December 31, 2011. (Assume that the effective interest method is used. Use the interest tables below and round to the nearest dollar.)
(b) Make all appropriate entries for 2012 on the books of Berry Corporation.
(c) Make all appropriate entries for 2013 on the books of Berry Corporation.
Perpetual Inventory System
The perpetual method of recording inventory refers to the control system through which inventory can be tracked and recorded on continual basis, as to calculate a current inventory balance on real time basis. It allows businesses to keep a real-time account inventory in hand.
Answer and Explanation: 1
Become a Study.com member to unlock this answer! Create your account
View this answera) In the books of Berry Corporation
(as on 31, December 2011)
| S.No | Particular | Dr. Amount | Cr. Amount | |
| 1 | Notes Receivable A/c | $500,000 | ||
| To Discount... |
See full answer below.
Ask a question
Our experts can answer your tough homework and study questions.
Ask a question Ask a questionSearch Answers
Learn more about this topic:
Get access to this video and our entire Q&A library
Notes Receivable: Definition, Maturity Date & Interest
from
Chapter 7 / Lesson 6
25K
Learn what loan maturity date is and how it affects your final loan payment. Find out the difference between short-term, medium-term, and long-term maturity dates.
Related to this Question
- On December 31, 2009 Berry Corporation sold some of its product to Flynn Company, accepting a 3%, four-year promissory note having a maturity value of $900,000 (interest payable annually on December 31). Berry Corporation pays 6% for its borrowed funds. F
- On December 31, 2013, Berry Corporation sold some of its product to Flynn Company, accepting a 3%, four-year promissory note, having a maturity value of $800,000 (interest payable annually on December
- A company purchased $1,800 of merchandise on December 5. On December 7, it returned $200 worth of merchandise. On December 8, it paid the balance in full, taking a 2% discount. The amount of the cash paid on December 8 equals: A. $200 B. $1,564 C. $1,5
- On July 1, 2014, Duke Corporation sold equipment to silver company for 100,000. Duke accepted a 10% note receivable for the entire sales price. This note is payable in two installments of 50,000 plus accrued interest on December 31, 2014 and December 31,
- Reese Company loaned $60,000 to another company on December 1, 2004, and received a twelve-month, 8% interest-bearing note. Interest and principal will be due on November 30, 2005. Under accrual accounting, what adjustment should Reese make on December 31
- On December 31, the company purchased a piece of land by issuing a note for $80,000. The note is payable in five years. The interest at 12% is payable annually on December 31 of each year starting in
- Berry Corporation issued a $50,000, 10%, 10-year installment note payable on January 1, 2012. Payments of $8,137 are made each January 1, beginning January 1, 2013. a. What amounts should be reported under current liabilities related to the note on Decemb
- Concord Corporation purchased a computer on December 31, 2016, for $107,100, paying $30,600 down and agreeing to pay the balance in five equal installments of $15,300 payable each December 31 beginning in 2017. An assumed interest rate of 9% is implicit i
- On December 31, 2011, Debenham Corporation sold for $15,000 an old machine having an original cost of $84,000 and a book value of $9,000. The terms of the sale were as follows: $3,000 down payment, $6,000 payable on December 31 of the next two years. The
- On September 1, the company receives a 5% interest bearing a note from company B to settle a $15,000 accounts receivable. the note is due in 6 months. On December 31, the company should record interest revenue of _____.
- On December 5, Z-Mart purchased $1,800 worth of merchandise. On December 7, Z-Mart returned $400 worth of merchandise. On December 8, the company paid the balance in full, taking a 2% discount. The amount of the payment was: a $3,600.50 b $4,630.50 $
- Wildhorse Corporation purchased a computer on December 31, 2016, for $138,600, paying $39,600 down and agreeing to pay the balance in five equal installments of $19,800 payable each December 31 beginning in 2017. An assumed interest rate of 9% is implicit
- A company received a Note Receivable from a customer for a sale. The 9 percent, 9-month note was received on May 31, 2011, for an amount of $120,000. Determine the company's accrued interest receivable (from this note) on its December 31, 2011 balance she
- On September 1, 2016, a company issued a $50,000, 6-month, 9% note payable to purchase equipment. At December 31, 2016, the company records an adjusting entry to accrue interest incurred by not paid. The company pays the note with interest at the maturity
- On December 1, DEF Company agreed to accept a $10,000 45-day note from a customer which bears 6% interest. Assume that no interest has been recorded during the year. If DEF uses the cash basis, how much interest revenue needs to be recorded on December 31
- On September 1, 2010, Dougherty Corp. accepted a six-month, 7%, $45,000 interest- bearing note from Rozelle Company in payment of an accounts receivable. Dougherty's year-end is December 31. Rozelle paid the note and interest on the due date. 1. Who is t
- On November 7, 2015, Mura Company borrows 160,000 cash by signing a 90-day, 8% note payable with a face value of 160,000. (1) Compute the accrued interest payable on December 31, 2015, (2) prepare the
- On December 11, the G. Baker Corporation purchases $15,000 of equipment by issuing a 30-day, 12% note payable. The amount of accrued interest on December 31 is? the total cash paid for interest at
- Starr Company loaned 600,000 to another corporation on December 1, 2017, and received a 3-Month, 8% interest-bearing note with a face value of 600,000. What adjusting entry should Starr make on December 31, 2017?
- On December 1, 2017, Hope company sold on credit to Wish company merchandise having a value of $6,000 and a cost of $3,600. Blake estimates that 10% of the merchandise will be returned within the return period. a. Prepare the journal entry for 12/31/2017.
- Coronado Corporation purchased a computer on December 31, 2016, for $149,100, paying $42,600 down and agreeing to pay the balance in five equal installments of $21,300 payable each December 31 beginning in 2017. An assumed interest rate of 8% is implicit
- On January 1, 2017, Ott Co. sold goods to Flynn Company. Flynn signed a zero-interest-bearing note requiring payment of $200,000 annually for seven years. The first payment was made on January 1, 2017. The prevailing rate of interest for this type of note
- On January 1, 20Y8, Smith Company sold land to ASP, Inc. and accepted a 2-year, $500,000 face value note as payment. 6% interest is due each December 31. ASP's market rate of borrowing is 12%. Smith Company originally purchased the land for $80,000 in 20Y
- On December 31, 2017, Pen Corporation purchased 80 percent of the stock of Sut Company at book value. The data reported on their separate balance sheets immediately after the acquisition follow. At December 31, 2017, Pen Corporation owes Sut $10,000 on ac
- On December 1, Watson Enterprises signed a $24,000, 60-day, 4% note payable as replacement of an account payable with Erikson Company. What amount of interest expense is accrued at December 31 on the note? a. $320 b. $80 c. $0 d. $160 e. $960
- On November 7, 2015, Mura company borrows $270.000 cash by signing a 90-day, 10% note payable with a face value of $270,000 (Use 360 days a year). Compute the accrued interest payable on December 31, 2015.
- On September 1, 2014, Dougherty Corp. accepted a six-month, 7%, $45,000 interest-bearing note from Rozelle Company in payment of an account receivable. Dougherty's year-end is December 31. Rozell paid
- On November 1, 2014, Salem Corporation sold land priced at $920,000 in exchange for a 6%, six-month note receivable. On May 1, 2015 (maturity date), the note is collected in full by Salem Corporation. Assuming a fiscal year-end of December 31, what will S
- On January 1, a company borrowed cash by issuing a $310,000, 4%, installment note to be paid in 3 equal payments at the end of each year beginning December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) What would be the amount
- On December 31, 2012, Flint Corporation sold for $100,000 an old machine having an original cost of $180,000 and a book value of $80,000. The terms of the sale were as follows: $20,000 down payment and $40,000 payable on December 31 each of the next two y
- Aaron and Michele, equal shareholders in Cavalier Corporation, receive $25,000 each in distributions on December 31 of the current year. During the current year, Cavalier sold an appreciated asset for $60,000 (basis of $15,000). Payment for the sale of th
- On December 31, 2008, Sisek Company borrowed $800,000 with a 10-year, 9.75 percent note interest payable semi-annually on June 30 and December 31. Cash in the amount of $792,800 was received when the note was issued. Required: 1. Provide the necessary j
- On December 9, a company purchased equipment for $60,000 cash. Journalize this transaction.
- Pearl Corporation purchased a computer on December 31, 2016, for $134,400, paying $38,400 down and agreeing to pay the balance in five equal installments of $19,200 payable each December 31 beginning
- On November 1, Jovel Company loaned another company $160,000 at a 9.0% interest rate. The note receivable plus interest will not be collected until March 1 of the following year. The company's annual accounting period ends on December 31. The amount of in
- On December 31, 2017, Faital Company acquired a computer from Plato Corporation by issuing a $600,000 zero-interest-bearing note, payable in full on December 31, 2021. Faital Company's credit rating permits it to borrow funds from its several lines of cre
- On December 31, 2014, Faital Company acquired a computer from Plato Corporation by issuing a $626,300 zero-interest-bearing note, payable in full on December 31, 2018. Faital Company's credit rating permits it to borrow funds from its several lines of cre
- On December 31, 2010, Faital Company acquired a computer from Plato Corporation by issuing a $600,000 zero-interest-bearing note, payable in full on December 31, 2014. Faital Company's credit rating permits it to borrow funds from its several lines of cre
- On December 31, 2010, Oakbrook Inc. rendered services to Begin Corporation at an agreed price of $102,049, accepting $40,000 down and agreeing to accept the balance in four equal instalments of $20,000 receivable each December 31. An assumed interest rate
- On December 31, 2014, Faital Company acquired a computer from Plato Corporation by issuing a $642,300 zero-interest-bearing note, payable in full on December 31, 2018. Faital Company's credit rating p
- On December 31, 2014, Oakbrook Inc. rendered services to Beghun Corporation at an agreed price of $102,049, accepting $40,000 down and agreeing to accept the balance in four equal installments of $20,000 receivable each December 31. An assumed interest ra
- Your company accepted a 120-day, 6% note for $189,000 from Winter Company on account. On the maturity date, Winter Company still cannot pay, so you accept a new a 60-day, 10% note for the full amount due (principal and interest). How much cash will you re
- On October 1, Doe Hunting Supplies, a calendar-year company, sold inventory that cost $60,000 for $100,000. The customer signed a six-month, 10 percent note in payment. On December 31, Woods should A) Debit Interest Receivable for $2,500 B) Debit Interest
- On December 5, a company sold land at a cost of $25,000. Journalize this transaction.
- Napoleon Corporation purchased a computer on December 31, 2011, for $130,000, paying $30,000 down and agreeing to pay the balance in five equal installments of $20,000 payable each December 31 beginning in 2012. An assumed interest rate of 10% is implicit
- On January 1, 2015, Spirit Company sold goods to Dash Corporation. Dash signed a noninterest-bearing note requiring payment of $17,100 annually for eight years. The first payment was made on January 1, 2015. The prevailing rate of interest for this type o
- On December 31, 2017, Wildhorse Co. sold equipment to Windsor, Inc. Wildhorse Co. agreed to accept a $630,000 zero-interest-bearing note due December 31, 2019, as payment in full. Windsor, Inc. was incorporated in 2017 and had very little credit history a
- On December 1, 2016, Lynch Incorporated sold $18,000 of merchandise with terms 2/10, n/EOM. On December 11, 2016, collections were made on sales originally billed for $12,000, and on December 31, 2016
- Your company accepted a 120-day, 6% note for $162,000 from Winter Company on account. On the maturity date, Winter Company still cannot pay, so you accept a new a 60-day, 10% note for the full amount due (principal and interest). How much cash will you re
- On December 31, 2017, Faital Company acquired a computer from Plato Corporation by issuing a $600,000 zero-interest-bearing note, payable in full on December 31, 2021. Faital Company's credit rating p
- On January 1, 2016, The Barrett Company purchased merchandise from a supplier. Payment was a a non-interest-bearing nole requiring five annual payments of $30,000 on each December 31 beginning on Dece
- On November 7 2017, Mura Company borrowed $240,000 cash by signing a 90-day, 11% note payable (use 360 days a year. Do not round your intermediate calculations.) Compute the accrued interest payable on December 31, 2017.
- On November 1, 2019, a firm accepted a 5-month, 10 percent note for $1,200 from a customer with an overdue balance. The accrued interest recorded for this note for the year ended December 31, 2019 would be what amount?
- Cardinals Corporation purchased a computer on December 31, 2013, for $209,580, paying $59,880 down and agreeing to pay the balance in five equal installments of $29,940 payable each December 31 beginning in 2014. An assumed interest rate of 10% is implici
- Cardinals Corporation purchased a computer on December 31, 2013, for $366,450, paying $104,700 down and agreeing to pay the balance in five equal installments of $52,350 payable each December 31 beginning in 2014. An assumed interest rate of 8% is implici
- Cardinals Corporation purchased a computer on December 31, 2013, for $105,000, paying $30,000 down and agreeing to pay the balance in five equal installments of $15,000 payable each on December 31 beginning in 2014. An assumed interest rate of 10% is impl
- Cardinals Corporation purchased a computer on December 31, 2013, for $129,570, paying $37,020 down and agreeing to pay the balance in five equal installments of $18,510 payable each December 31 beginning in 2014. An assumed interest rate of 9% is implicit
- Cardinals Corporation purchased a computer on December 31, 2013, for $366,450, paying $104,700 down and agreeing to pay the balance in five equal installments of $52,350 payable each December 31 beginning in 2014. An assumed interest rate of 8% is implic
- Cardinals Corporation purchased a computer on December 31, 2013, for $366,450, paying $104,700 down and agreeing to pay the balance in five equal installments of $52,350 payable each December 31 beginning in 2014. An assumed interest rate of 8% is impli
- Bent Corporation, an accrual basis taxpayer, is owned by Ben, a cash basis taxpayer. On December 31, 2006 the corporation accrues interest revenue of $5,000 on a note to Ben which was executed on March 1, 2007. The interest is not paid until 2007. How muc
- Ayayai Corporation purchased a computer on December 31, 2016, for $144,900, paying $41,400 down and agreeing to pay the balance in five equal installments of $20,700 payable each December 31 beginning in 2017. An assumed interest rate of 10% is implicit i
- On November 7, 2017, Mura Company borrows $400,000 cash by signing a 90-day, 12% note payable with a face value of $400,000. (Use 360 days a year. Do not round your intermediate calculations.) Compute the accrued interest payable on December 31, 2017. Pre
- On December 31, 2016, Priestly Company purchased a controlling interest in Shelter Company for $1,060,000. The consolidated balance sheet on December 31, 2016 reported noncontrolling interest in Shelter Company of $265,000. On the date of acquisition, the
- Webb Corporation purchased an asset from Shaw Corporation on January 1, 2016. Shaw accepted a 3-year, non-interest-bearing note of $18,000 due December 31, 2018, in exchange for the asset. Neither the
- On November 1, 2021, a company signed a $110,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on May 1, 2022. The company should report interest payable of what amount at December 31, 2021?
- Marin Corporation purchased a computer on December 31, 2016, for $147,000, paying $42,000 down and agreeing to pay the balance in five equal installments of $21,000 payable each December 31 beginning
- On December 31, 2013, Wasley Corporation borrowed $500,000 on a 10%, 10-year mortgage note payable. The note is to be repaid with equal semiannual installments, beginning June 30, 2014. Required: a.
- Prinkle Corporation had purchased equipment for $50,000 on January 1, 2015. On December 31, 2017, the corporation sold the equipment for $23,000. Accumulated Depreciation as of December 31, 2017 was $25,000. Calculate gain or loss on sale.
- Indigo Corporation purchased a computer on December 31, 2016, for $140,700, paying $40,200 down and agreeing to pay the balance in five equal installments of $20,100 payable each December 31 beginning in 2017. An assumed interest rate of 9% is implicit in
- On January 1, a company borrowed cash by issuing a $300,000, 5%, installment note to be paid in three equal payments at the end of each year beginning December 31. 1. What would be the amount of each installment? 2. Prepare an amortization table for the
- On January 1, 2013, The Barrett Company purchased merchandise from a supplier. Payment was a noninterest-bearing note requiring five annual payments of $25,000 on each December 31 beginning on Decembe
- On January 1, 2013, The Barrett Company purchased merchandise from a supplier. Payment was a noninterest-bearing note requiring five annual payments of $24,000 on each December 31 beginning on Decembe
- On January 1, 2016, The Barrett Company purchased merchandise from a supplier. Payment was a noninterest-bearing note requiring five annual payments of $30,000 on each December 31 beginning on Decembe
- Oliver, Inc. sells an old piece of equipment on December 31st, 2015, agreeing to accept $10,000 in cash with a second payment one month later of $10,000, and a note receivable that pays interest annua
- On August 1, 2006, the Frost Company purchased property from Anderson that had a fair value of $399,271. Frost gave Anderson a $500,000 non interest-bearing note payable in five equal annual installments of $100,000 with the first payment due July 31, 200
- a) On 9/1, a company accepts a $10000, 5% , 8-month note receivable. b) On 3/1, a company accepts a $20,000, 8%, 6-month note receivable. c) On 6/1, a company acceptes a $15,000, 10% , 4-month not receivable. Assuming a december 31 year end, calculate
- Tate Company purchased equipment on November 1, 2017, and gave a 3-month, 9% note with a face value of $80,000. What is the December 31, 2017 adjusting entry?
- Tate Company purchased equipment on November 1, 2018, and gave a 3-month, 9% note with a face value of $80,000. What is the December 31, 2018 adjusting entry?
- A company purchased a three-month insurance policy for $450 on December 1. On December 31, the company should: A. Debit prepaid insurance and credit insurance expense, $450. B. Debit insurance expense and credit prepaid insurance, $450. C. Debit prepai
- On December 21, a company borrowed $100,000 from its bank. The loan has an annual interest rate of 10%. The first payment on the loan will be due on January 21. The company's accounting year ends on December 31. What accounts will be debited and credited
- Oriole Company has the following transactions related to notes receivable during the last 2 months of 2019. The company does not make entries to accrue interest except on December 31. Nov. 1 Loaned $
- At December 31, 2017, Monty Corporation reported the following plant assets. During 2018, the following selected cash transactions occurred. Apr.1: Purchased land for $3,434,200. May 1: Sold equipme
- On July 1, 2017, Pina Corporation purchased Young Company by paying $261,500 cash and issuing a $103,000 note payable to Steve Young. At July 1, 2017, the balance sheet of Young Company was as follows
- On December 21, a company borrowed $100,000 from its bank. The loan has an annual interest rate of 10%. The first payment on the loan will be due on January 21. The company's accounting year ends on December 31. What will be the amount of the December 31
- Plunder Inc. accepted a six-month non-interest-bearing note for $2,800 on January 1, 2016. The note was accepted as payment of a delinquent receivable of $2,500. The cash collection on July 1, 2016, would be recorded as: a. Discount on note receivable 30
- On January 1, 2009, Pink Company finished consultation services and accepted in exchange a promissory note with a face value of $400,000, a due date of December 31, 2012, and a stated rate of 8%, with interest receivable at June 30th and December 31st. Th
- On December 1st 2015 a company borrowed $200,000 at 12% per year. The interest will be paid quarterly, with the first payment due on July 1. What should the company report on its income statement as a
- On November 1 of the current year, Garcia Company borrowed $84,000 by issuing a 16%, six-month note payable, all due at maturity date. Interest expense on this note to be recognized during the current
- On October 1, Bandor Company sold land (that cost $30,000) on credit for $35,000. The buyer issued an 8%, 12-month note for this amount, with the interest to be paid on the maturity date Prepare journal entries to record the same of the land and the rela
- Elburn Supply Co. has the following transactions related to notes receivable during the last 2 months of 2017. The company does not make entries to accrue interest except at December 31. Nov. 1 Loaned
- Wexler Company had the following activities for the year ended December 31, 2012: Sold land that cost $18,000 for $18,000 cash; purchased $181,000 of equipment, paying $156,000 in cash and signing a note payable for the rest; and recorded $5,500 in deprec
- 1. On December 1, Buckbeak Company borrowed $20,000 from Pettigrew Company, giving a 60-day, 12% note. If the correct adjusting entry is made on December 31, Buckbeak's entry at maturity is: A Notes
- Zavier Company must make three adjusting entries on December 31, 2016. a. Supplies used, $10,000; (supplies totaling $16,000 were purchased on December 1, 2016, and debited to the Supplies account). b. Expired insurance, $7,200 on December 1, 2016; the
- On December 21, a company borrowed $100,000 from its bank. The loan has an annual interest rate of 10%. The first payment on the loan will be due on January 21. The company's accounting year ends on December 31. If the December 31 adjusting entry is not m
- During December, the capital budget indicates a $280,000 purchase of equipment. The ending November cash balance is budgeted to be $40,000. Cash receipts are $840,000, and cash disbursements are $610,000 during December. The company wants to maintain a mi
Explore our homework questions and answers library
Browse
by subject