ACCT 110 Study Guide - Final Guide: Promissory Note
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Rolling Hills Golf Inc. was organized on July 1, 2012. Quarterlyfinancial statements are prepared. The trial balance and adjustedtrial balance on September 30 are shown here.
ROLLING HILLS GOLF INC. | ||||
Unadjusted | Adjusted | |||
Dr. | Cr. | Dr. | Cr. | |
Cash | $ 6,700 | $ 6,700 | ||
Accounts Receivable | 400 | 1,000 | ||
Prepaid Rent | 1,800 | 900 | ||
Supplies | 1,200 | 180 | ||
Equipment | 15,000 | 15,000 | ||
Accumulated DepreciationâEquipment | $ 350 | |||
Notes Payable | $ 5,000 | 5,000 | ||
Accounts Payable | 1,070 | 1,070 | ||
Salaries and Wages Payable | 600 | |||
Interest Payable | 50 | |||
Unearned Rent Revenue | 1,000 | 800 | ||
Common Stock | 14,000 | 14,000 | ||
Retained Earnings | 0 | 0 | ||
Dividends | 600 | 600 | ||
Service Revenue | 14,100 | 14,700 | ||
Rent Revenue | 700 | 900 | ||
Salaries and Wages Expense | 8,800 | 9,400 | ||
Rent Expense | 900 | 1,800 | ||
Depreciation Expense | 350 | |||
Supplies Expense | 1,020 | |||
Utilities Expense | 470 | 470 | ||
Interest Expense | 50 | |||
$35,870 | $35,870 | $37,470 | $37,470 |
Instructions
(a) Journalize the adjusting entries that were made.
(b) Prepare an income statement and a retained earningsstatement for the 3 months ending September 30 and a classifiedbalance sheet at September 30.
(c) Identify which accounts should be closed on September30.
(d) If the note bears interest at 12%, how many months has itbeen outstanding?
Maturity Dates of Notes Payable
Determine the maturity date andcompute the interest for each of the following notes payable withadd-on interest:
Date of Note | Principal | interest Rate(%) | Term | |
a | Aug-8 | 15,000 | 9% | 120 days |
b | May-10 | 8,400 | 7% | 90 days |
c | Oct-5 | 12,000 | 9% | 45 days |
d | Jul-6 | 4,500 | 10% | 60 days |
e | Sep-15 | 1,200 | 8% | 75 days |