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Water Closet Co. wholesales bathroom fixtures. During the current year ending December 31, Water Closet received the following notes: Date Face Amount Term Interest Rate
Water Closet Co. wholesales bathroom fixtures. During the current year ending December 31, Water Closet received the following notes:
Date | Face Amount | Term | Interest Rate | |
1. | Mar. 6 | $75,000 | 60 days | 6% |
2. | Apr. 7 | 40,000 | 45 days | 10% |
3. | Aug. 12 | 36,000 | 120 days | 5% |
4. | Oct. 22 | 27,000 | 30 days | 6% |
5. | Nov. 19 | 48,000 | 90 days | 3% |
6. | Dec. 15 | 72,000 | 45 days | 4% |
Required: | |
1. | Determine for each note (a) the due date and (b) the amount of interest due at maturity, identifying each note by number. Assume a 360-day year. (Note: Round each interest computation to the nearest cent.) |
2. | Journalize the entry to record the dishonor of Note (3) on its due date. Refer to the Chart of Accounts for exact wording of account titles. |
3. | Journalize the adjusting entry to record the accrued interest on Notes (5) and (6) on December 31. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year. (Note: Round each interest computation to the nearest cent.) |
4. | Journalize the entries to record the receipt of the amounts due on Notes (5) and (6) in January and February. Refer to the Chart of Accounts for exact wording of account titles. |
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