Jones, Inc. has an Account Payable of $40,000 which it cannot pay on time. Jones' vendor allows the company to replace the Accounts Payable with a 108-day, 7 percent, $40,000 interest-bearing note.

_______________________________________________

Assume Jones does not close its books during the life of the note. Provide the journal entry Jones will record upon maturity of the note:

Question 16 options:

Dr. Note Payable $40,000

Dr. Interest Expense $840

Cr. Cash $40,840

Dr. Note Payable $40,000

Dr. Interest Revenue $840

Cr. Cash $40,840

Dr. Note Payable $40,000

Cr. Cash $40,000

Dr. Note Payable $40,840

Cr. Cash $40,840

Question 17(Mandatory)(2.5 points)

Jones, Inc. has an Account Payable of $40,000 which it cannot pay on time. Jones' vendor allows the company to replace the Accounts Payable with a 108-day, 7 percent, $40,000 interest-bearing note.

_______________________________________________

Assume Jones closes its books 27 days after the note is issued (Day 27). Provide the journal entry Jones will record on Day 27 when the books are closed:

Question 17 options:

Dr. Interest Expense $840

Cr. Interest Payable $840

Dr. Interest Expense $630

Cr. Interest Payable $630

Dr. Interest Expense $420

Cr. Interest Payable $420

Dr. Interest Expense $210

Cr. Interest Payable $210

Question 18(Mandatory)(2.5 points)

Jones, Inc. has an Account Payable of $40,000 which it cannot pay on time. Jones' vendor allows the company to replace the Accounts Payable with a 108-day, 7 percent, $40,000 interest-bearing note.

_______________________________________________

Assume Jones closes its books 27 days after the note is issued (Day 27). Provide the journal entry Jones will recordon Day 108 upon maturity of the note:

Question 18 options:

Dr. Note Payable $40,000

Dr. Interest Revenue $630

Dr. Interest Payable $210

Cr. Cash $40,840

Dr. Note Payable $40,000

Dr. Interest Expense $630

Cr. Cash $40,630

Dr. Note Payable $40,000

Dr. Interest Expense $840

Cr. Cash $40,840

Dr. Note Payable $40,000

Dr. Interest Expense $630

Dr. Interest Payable $210

Cr. Cash $40,840

Payroll Liabilities

Question 19(Mandatory)(2.5 points)

William Corp. pays its employees every two weeks. Employee wages earned over a two-week period is $250,000. All wages are subject to social security and Medicare taxes, while $50,000 of wages are subject to federal and state unemployment taxes. Tax rates are the following:

Social security tax 6.0%

Medicare tax 1.5%

State unemployment compensation tax 5.4%

Federal unemployment compensation tax 0.8%

Additionally, the total amount withheld from wages for federal income taxes is $75,000 and the total amount withheld for state income taxes is $12,500.

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When William Corp. records the journal entry to recognizepayrollevery two weeks,Wage Expensewill be:

Question 19 options:

Neither debited nor credited

Credited for $143,750

Debited for $250,000

Debited for $143,750

Credited for $250,000

Question 20(Mandatory)(2.5 points)

William Corp. pays its employees every two weeks. Employee wages earned over a two-week period is $250,000. All wages are subject to social security and Medicare taxes, while $50,000 of wages are subject to federal and state unemployment taxes. Tax rates are the following:

Social security tax 6.0%

Medicare tax 1.5%

State unemployment compensation tax 5.4%

Federal unemployment compensation tax 0.8%

Additionally, the total amount withheld from wages for federal income taxes is $75,000 and the total amount withheld for state income taxes is $12,500.

________________________________________

When William Corp. will recordspayrollevery two weeks,Wages Payablewill be:

Question 20 options:

Debited for $143,750

Debited for $250,000

Credited for $143,750

Neither debited nor credited

Credited for $250,000

Question 21(Mandatory)(2.5 points)

William Corp. pays its employees every two weeks. Employee wages earned over a two-week period is $250,000. All wages are subject to social security and Medicare taxes, while $50,000 of wages are subject to federal and state unemployment taxes. Tax rates are the following:

Social security tax 6.0%

Medicare tax 1.5%

State unemployment compensation tax 5.4%

Federal unemployment compensation tax 0.8%

Additionally, the total amount withheld from wages for federal income taxes is $75,000 and the total amount withheld for state income taxes is $12,500.

________________________________________

When William Corp. will recordspayrollevery two weeks,Social Security Tax Payablewill be:

Question 21 options:

Debited for $3,750

Credited for $15,000

Neither debited nor credited

Credited for $3,750

Debited for $15,000

Question 22(Mandatory)(2.5 points)

William Corp. pays its employees every two weeks. Employee wages earned over a two-week period is $250,000. All wages are subject to social security and Medicare taxes, while $50,000 of wages are subject to federal and state unemployment taxes. Tax rates are the following:

Social security tax 6.0%

Medicare tax 1.5%

State unemployment compensation tax 5.4%

Federal unemployment compensation tax 0.8%

Additionally, the total amount withheld from wages for federal income taxes is $75,000 and the total amount withheld for state income taxes is $12,500.

________________________________________

When William Corp. records the journal entry to recognizepayrollevery two weeks,MedicareTax Payablewill be:

Question 22 options:

Debited for $3,750

Neither debited nor credited

Credited for $3,750

Credited for $15,000

Debited for $15,000