Valley Designs issued a 120-day, 5% note for $82,600, dated April 15 to Bork Fur
ID: 342408 • Letter: V
Question
Valley Designs issued a 120-day, 5% note for $82,600, dated April 15 to Bork Furniture Company on account.
Required:
Journalize the entries to record the following: (1) receipt of the note by Bork Furniture and (2) receipt of payment of the note at maturity. Refer to the Chart of Accounts for exact wording of account titles. Round your answer to the nearest dollar.
A. Determine the due date of the note. B. Determine the maturity value of the note. Assume a 360-day year. Round your answer to the nearest dollar. C.Journalize the entries to record the following: (1) receipt of the note by Bork Furniture and (2) receipt of payment of the note at maturity. Refer to the Chart of Accounts for exact wording of account titles. Round your answer to the nearest dollar.
CHART OF ACCOUNTS Bork Furniture Company General Ledger ASSETS 110 Cash 111 Petty Cash 121 Accounts Receivable-Valley Designs 129 Allowance for Doubtful Accounts 132 Notes Receivable 141 Merchandise Inventory 145 Office Supplies 146 Store Supplies 151 Prepaid Insurance 181 Land 191 Store Equipment 192 Accumulated Depreciation-Store Equipment 193 Office Equipment 194 Accumulated Depreciation-Office Equipment LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable EQUITY 310 Common Stock 311 Retained Earnings 312 Dividends 313 Income Summary REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Merchandise Sold 520 Sales Salaries Expense 521 Advertising Expense 522 Depreciation Expense-Store Equipment 523 Delivery Expense 524 Repairs Expense 529 Selling Expenses 530 Office Salaries Expense 531 Rent Expense 532 Depreciation Expense-Office Equipment 533 Insurance Expense 534 Office Supplies Expense 535 Store Supplies Expense 536 Credit Card Expense 537 Cash Short and Over 538 Bad Debt Expense 539 Miscellaneous Expense 710 Interest Expense C. (1) Journalize the entry to record the receipt of the note by Bork Furniture. Refer to the Chart of Accounts for exact wording of account tities. Round your answer to the nearest dollar. PAGE 1 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF DEBIT CREDIT ASSETS LIABILITIES EQUITY C. (2) Journalize the entry to record the receipt of payment of the note at maturity. Refer to the Chart of Accounts for exact wording of account tities. Round your answer to the nearest dollar.Explanation / Answer
a) due date Days April (30-15)= 15 May 31 june 30 july 31 Aug 13 120 hence due date is August 13 b) Maturity value of the note principal 82600 interest =82600*5%*120/360= 1377 Maturity value of the note 83977 c) Journal Entries Date Accounting titles & explanations Debit Credit 15-Apr note receivable 82,600 Account receivable 82,600 13-Aug Cash 83,977 interest income 1377 note receivable 82,600
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