College Acct 1- Chapter 7

Synergy Corp. accepted a $2,400, 90-day, 10% note from Johnson Inc. on November 1. What entry should Uniform Supply make on January 30 of the next year when the note is paid? (Assume reversing entries are NOT made)

• Debit Cash $2,460; credit Interest Revenue $60; credit Notes Receivable $2,400

• Debit Cash $2,460; Credit Notes Receivable $2,460

• Debit Notes Receivable $2,400; debit Interest Receivable $60; credit Sales $2,460

• Debit Cash $2,460; Credit Interest Revenue $20; credit Interest Receivable $40; credit Notes Receivable $2,400

Majesty Productions accepted a $7,200, 120-day, 6% note from Swartz Studio on March 1. On the date the note matures, Swartz is unable to pay, but Majesty intends to continue collection efforts. What entry should Majesty record on the maturity date for this dishonored note?

• Debit Accounts Receivable $7,200; credit Notes Receivable $7,200

• Debit Accounts Receivable $7,056; debit Interest Revenue $144; credit Notes Receivable $7,200

• Debit Bad Debt Expense $7,344; credit Notes Receivable $7,344

• Debit Accounts Receivable $7,344; credit Interest Revenue $144; credit Notes Receivable $7,200

• Debit Accounts Receivable $7,200; credit Allowance for Doubtful Accounts $7,200

Bloom Marketing uses the allowance method to account for uncollectible accounts. Its year-end unadjusted trial balance shows Accounts Receivable of $98,500, allowance for doubtful accounts of $425 (credit) and sales of $925,000. If uncollectible accounts are estimated to be 5% of accounts receivable, what is the amount of bad debts expense adjusting entry?

• $4,180

• $3,850

• $46,250

• $4,925

• $4,500

Office Tile bought $2,500 worth of merchandise from Food Suppliers and signed a 90-day, 6% promissory note for the $2,500. Food Supplier's journal entry to record the sales transaction is:

• Debit Notes Receivable $2,537.50; credit Sales $2,537.50

• Debit Notes Receivable $2,500; credit Sales $2,500

• Debit Accounts Receivable $2,537.50; credit Sales $2,537.50

• Debit Accounts Receivable $2,500; credit Sales $2,500

• Debit Notes Receivable $2,500; debit Interest Receivable $37.50; credit Sales $2,537.50

A company borrowed $100,000 by signing a 90-day promissory note at 8%. The total interest due on the maturity date is: (USE 360 DAYS A YEAR.)

• $200

• $1,800

• $8,000

• $2,000

• $102,000

When does a note receivable become due?

• On the date of the credit sale

• On the date of the first payment

• On the last day of the month

• On the maturity date

• On the date the note was signed

Smart Phone Repair factored $35,000 of its accounts receivable and was charged a 4% factoring fee. The journal entry to record this transaction would include a:

• Debit to Cash of $35,000 and a credit to Accounts Receivable of $35,000

• Debit to Cash of $35,000, a debit to Factoring Fee Expense of $1,400, and a credit to Accounts Receivable of $36,400

• Debit to Cash of $36,400 and a credit to Accounts Receivable of $36,400

• Debit to Cash of $35,000 and a credit of $35,000 to Notes Payable

• Debit to Cash of $33,600, a debit to Factoring Fee Expense of $1,400, and a Credit to Accounts Receivable of $35,000

Fix Guru bought $4,000 worth of merchandise from LZ Inc. and signed a 90-day, 6% promissory note for the $4,000. LZ Inc's journal entry to record the collection on the maturity date is: (Use 360 days a year.)

• Debit Notes Receivable $4,000; Credit Cash $4,000

• Debit Cash $4,060; Credit Interest Revenue $60; credit Notes Receivable $4,000

• Debit Cash $4,060; Credit Notes Receivable $4,060

• Debit Notes Receivable $4,060; Credit Sales $4,060

• Debit Cash $4,000; Debit Interest Receivable $60; Credit Sales $4,060

Kenai Company sold $600 of merchandise to a customer who used a National Bank credit card. National Bank deducts a 3% service charge for sales on its credit cards. Kenai electronically remits the credit card sales receipts to the credit card company and receives payment immediately. The journal entry to record the collection is:

• Debit Accounts Receivable $582; Debit Credit Card Expense $18; Credit Sales $600

• Debit Cash $582; Debit Credit Card Expense $18; Credit Sales $600

• Debit Cash $582; Credit Sales $582

• Debit Cash $618; Credit Accounts Receivable $618

• Debit Cash $618; Credit Credit Card Expense $18; Credit Sales $600

Beep Sports borrowed $8,000 by signing a 180-day promissory note at 8%. The maturity value of the note is: (Use 360 days a year.)

• $10,900

• $8,640

• $8,320

• $8,000

• $320