Zing Cell Phone Company entered into the following transactions involving curren
ID: 2606497 • Letter: Z
Question
Zing Cell Phone Company entered into the following transactions involving current liabilities during 2017 and 2018.
Purchased merchandise on credit from Ferris Inc. for $146,000. The terms were 1/10, n/30 (assume a perpetual inventory system).
Zing paid $28,000 cash and replaced the $118,000 remaining balance of the account payable to Ferris Inc. with a 4%, 60-day note payable.
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. Round your answers to 2 decimal places.)
1
Record the purchase of merchandise on credit.
2
Record the payment of cash and a note written to exchange 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.
2017 Mar. 14Purchased merchandise on credit from Ferris Inc. for $146,000. The terms were 1/10, n/30 (assume a perpetual inventory system).
Apr. 14Zing paid $28,000 cash and replaced the $118,000 remaining balance of the account payable to Ferris Inc. with a 4%, 60-day note payable.
May 21 Borrowed $128,000 from Scotia Bank by signing a 3.5%, 90-day note. ? Paid the note to Ferris Inc. at maturity. ? Paid the note to Scotia Bank at maturity. Dec. 15 Borrowed $103,000 and signed a 4.25%, 120-day note with National Bank. Dec. 31 Recorded an adjusting entry for the accrual of interest on the note to National Bank. 2018 ? Paid the note to National Bank at maturity.Explanation / Answer
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April 14 + 60 Days = June 13 May 21 + 90 Days = August 19 December 15 + 120 Days = April 14Related Questions
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