M Sport Ltd. has a December 31 year-end and prepares its adjusting journal entries annually. A...
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M Sport Ltd. has a December 31 year-end and prepares its adjusting journal entries annually. A partial excerpt from the Statement of Financial Position as at December 31, 2022 is shown below: Current Liabilities Interest payable on note Note payable (3-month note with 6% interest due at maturity on January 31, 2023) $250 $25,000 Shareholders' Equity Preferred shares - $2 non-cumulative, 5,000,000 authorized, 25,000 issued Common shares - unlimited authorized, 100,000 issued $1,000,000 $2,500,000 The following transactions occurred in 2023: June 30, 2023 Signed a 4-year 8% mortgage payable of $500,000. The mortgage requires semi-annual payments of $74,264 on June 30 and December 31. July 1, 2023 Declared the annual cash dividend to the preferred shareholders of record on July 20, payable August 5. Required: a) Prepare the journal entry that M Sport Ltd. would record on the maturity of the note payable on January 31, 2023. (2 marks) Date Account Name Debit Credit b) Prepare the instalment payment schedule for the first 4 payments of the mortgage payable. Round all calculations to the nearest dollar. (5 marks) Date June 30, 2023 December 31, 2023 June 30, 2024 December 31, 2024 June 30, 2025 Cash Payment Interest Expense Principal Reduction Principal Balance c) Prepare the journal entry that M Sport Ltd. would record for the mortgage payable on December 31, 2023. (3 marks) Date Account Name Debit Credit d) Show the amounts that M Sport Ltd. will report for the mortgage payable for the current liabilities and non-current liabilities sections at December 31, 2023. (2 marks) Current liabilities Non-current liabilities e) Prepare the journal entries that M Sport Ltd. would record for the preferred shares dividends on July 1, 2023; July 20, 2023; and August 5, 2023. If no journal entry is required, state "No Entry" for your answer. (6 marks) M Sport Ltd. has a December 31 year-end and prepares its adjusting journal entries annually. A partial excerpt from the Statement of Financial Position as at December 31, 2022 is shown below: Current Liabilities Interest payable on note Note payable (3-month note with 6% interest due at maturity on January 31, 2023) $250 $25,000 Shareholders' Equity Preferred shares - $2 non-cumulative, 5,000,000 authorized, 25,000 issued Common shares - unlimited authorized, 100,000 issued $1,000,000 $2,500,000 The following transactions occurred in 2023: June 30, 2023 Signed a 4-year 8% mortgage payable of $500,000. The mortgage requires semi-annual payments of $74,264 on June 30 and December 31. July 1, 2023 Declared the annual cash dividend to the preferred shareholders of record on July 20, payable August 5. Required: a) Prepare the journal entry that M Sport Ltd. would record on the maturity of the note payable on January 31, 2023. (2 marks) Date Account Name Debit Credit b) Prepare the instalment payment schedule for the first 4 payments of the mortgage payable. Round all calculations to the nearest dollar. (5 marks) Date June 30, 2023 December 31, 2023 June 30, 2024 December 31, 2024 June 30, 2025 Cash Payment Interest Expense Principal Reduction Principal Balance c) Prepare the journal entry that M Sport Ltd. would record for the mortgage payable on December 31, 2023. (3 marks) Date Account Name Debit Credit d) Show the amounts that M Sport Ltd. will report for the mortgage payable for the current liabilities and non-current liabilities sections at December 31, 2023. (2 marks) Current liabilities Non-current liabilities e) Prepare the journal entries that M Sport Ltd. would record for the preferred shares dividends on July 1, 2023; July 20, 2023; and August 5, 2023. If no journal entry is required, state "No Entry" for your answer. (6 marks)
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Related Book For
Introduction To Financial Accounting
ISBN: 978-0077138448
7th edition
Authors: Anne Marie Ward, Andrew Thomas
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