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Tiger Co. agrees to lend Lion Co $70,000 on May 1, 2024. Lion Co. signs a $70,000 6% seven-month note maturing on January 1. Record the journal entries for Lion on 5/1/24, 12/31/24, and 1/1/25.
5/1/24
12/31/24
1/1/25
- 5/1/24
- Cash 70,000
- Notes payable 70,000
- 12/31/24
- 70,000 x 0.06 (7/12)= 2,450
- Interest Expense 70,000
- Interest Payable 2,450
- Cash 72,450
- 1/1/25
- Notes Payable 70,000
- Interest Payable 2,450
- Cash 72,450
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Tiger Co's March 31st cash register readings show sales of $60,000 and sales taxes pf $4,200 (sales tax rate 7%). The journey entry is
3/31/24
- 3/31/24
- Cash 64,200
- Sales Revenue 60,000
- Sales tax payable 4,200
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Tiger Co's total cash register receipts show a total of $70,085 including a 7% sales tax. The journal entry is
3/31/24
- 3/31/24
- (70,085 / 1.07)= 65,500
- Cash 70,085
- Sales revenue 65,500
- Sales tax payable 4,585
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Issuing Bonds:
$40,000 bonds issues at 98 would sell for _____
And are sold at ______ (par, premium, discount)
$600,000 bonds issued at 100 would sell for _______
And are sold at _____ (par, premium, discount)
$490,000 bonds issued at 103 would sell for ______
And ware sold at ______ (par, premium, discount)
- 40,000 x 0.98= 39,200
- Sold at discount
- 600,000 x 1.0= 600,000
- Sold at par
- 490,000 x 1.03= 504,700
- Sold at premium
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If the market rate is higher than the contractual rate, bonds are sold at _____
Discount
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If the market rate is lower than the contractual rate, bonds are sold at _____
Premium
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Tiger Co issues 50, 3 year, 8%, $6,000 bonds dated January 1, 2024 at 100. Interest is to be paid each January 1st. Record Tiger Co's Journal entries for the following dates:
1/1/24
12/31/24
1/1/25
- 1/1/24
- 50 bonds x $6,000= 300,000
- Cash 300,000
- Bonds Payable 300,000
- 12/31/24
- 300,000 x 0.08= 24,000
- Interest Expense 24,000
- Interest Payable 24,000
- 1/1/25
- Interest Payable 24,000
- Cash 24,000
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