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1
Kohl Company
lent $54,500 to Hemingway, Inc, accepting Hemingway’s 2-year, $67,756,
zero-interest-bearing note. The implied interest rate is 11.5%. Prepare Kohl’s
journal entries for the initial transaction, recognition of interest each year,
and the collection of $67,756 at maturity. (Credit
account titles are automatically indented when the amount is entered. Do not
indent manually.)
Account Titles and
Explanation
Debit
Credit
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2
For each event
listed below, select the appropriate category which describes the effect of the
event on a statement of cash flows:
1.
Payment on long-term debt
2.
Issuance of bonds at a premium
3.
Collection of accounts receivable
4.
Cash dividends declared
5.
Issuance of stock to acquire land
6.
Sale of available-for-sale securities (long-term)
7.
Payment of employees’ wages
8.
Issuance of common stock for cash
9.
Payment of income taxes payable
10.
Purchase of equipment
11.
Purchase of treasury stock (common)
12.
Sale of real estate held as a long-term investment
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3
A trial balance
before adjustment included the following:
Debit
Credit
Accounts receivable
$128,000
Allowance for doubtful accounts
670
Sales
$342,000
Sales returns and allowances
8,200
Give journal entries assuming that
the estimate of uncollectibles is determined by taking(1) 6% of
gross accounts receivable (Credit account titles are
automatically indented when the amount is entered. Do not indent
manually.)
Account Titles and
Explanation
Debit
Credit
(2)1% of net
sales. (Credit account titles are automatically
indented when the amount is entered. Do not indent
manually.)
Account Titles and
Explanation
Debit
Credit
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4
Amy Monroe
wants to create a fund today that will enable her to withdraw $30,840 per year
for 6 years, with the first withdrawal to take place 5 years from today. (Use
the tables below.)If the fund earns 9% interest, how much must Amy invest
today? (Round factor values to 5 decimal places, e.g.
1.25124 and final answers to 0 decimal places, e.g.
458,581.)
Investment amount
$
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