Question
Marydale Products permits its customers to defer payment by giving personal notes instead of cash. All the notes bear interest and require the customer to
Marydale Products permits its customers to defer payment by giving personal notes instead of cash. All the notes bear interest and require the customer to pay the entire note in a single payment 6 months after issuance. Consider the following transactions, which describe Marydales experience with two such notes: a. On October 31, 2019, Marydale accepts a 6-month, 9% note from Customer A in lieu of a $4,200 cash payment for services provided that day. b. On February 28, 2020, Marydale accepts a 6-month, $1,800, 6% note from Customer B in lieu of a $1,800 cash payment for services provided on that day. c. On April 30, 2020, Customer A pays the entire note plus interest in cash. d. On August 31, 2020, Customer B pays the entire note plus interest in cash. Required: Prepare the necessary journal and adjusting entries required to record Transactions a through d in Marydales records.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started