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    Pittance Company Requirement: Prepare Journal Entries To Record The Transactions Debit Credit

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    Anonn
    Pittance Company received a $2 million bank loan in March which they recorded by debiting cash and crediting note payable. In April they collected $1 million of accounts receivable and $980,000 in cash while giving $20,000 in sales discounts. In June they collected another $2 million of accounts receivable in cash. In September they fully paid off the $2 million bank note by debiting the note payable and crediting cash, while also debiting $120,000 in interest expense for the 6 months the note was outstanding.

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    Pittance Company Requirement: Prepare Journal Entries To Record The Transactions Debit Credit

    Uploaded by

    Anonn
    958 views1 page
    Pittance Company received a $2 million bank loan in March which they recorded by debiting cash and crediting note payable. In April they collected $1 million of accounts receivable and $980,000 in cash while giving $20,000 in sales discounts. In June they collected another $2 million of accounts receivable in cash. In September they fully paid off the $2 million bank note by debiting the note payable and crediting cash, while also debiting $120,000 in interest expense for the 6 months the note was outstanding.

    Original Description:

    Intermediate Accounting1

    Original Title

    8-1

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    Pittance Company received a $2 million bank loan in March which they recorded by debiting cash and crediting note payable. In April they collected $1 million of accounts receivable and $980,000 in cash while giving $20,000 in sales discounts. In June they collected another $2 million of accounts receivable in cash. In September they fully paid off the $2 million bank note by debiting the note payable and crediting cash, while also debiting $120,000 in interest expense for the 6 months the note was outstanding.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    958 views1 page

    Pittance Company Requirement: Prepare Journal Entries To Record The Transactions Debit Credit

    Uploaded by

    Anonn
    Pittance Company received a $2 million bank loan in March which they recorded by debiting cash and crediting note payable. In April they collected $1 million of accounts receivable and $980,000 in cash while giving $20,000 in sales discounts. In June they collected another $2 million of accounts receivable in cash. In September they fully paid off the $2 million bank note by debiting the note payable and crediting cash, while also debiting $120,000 in interest expense for the 6 months the note was outstanding.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 1

    Pittance Company

    Requirement: Prepare journal entries to record the transactions


    Debit Credit

    Mar-01 Cash 2,000,000


    Note payable - Bank 2,000,000

    Apr-01 Cash 980,000


    Sales discount 20,000
    Accounts receivable 1,000,000

    Jun-01 Cash 2,000,000


    Accounts receivable 2,000,000

    Sep-01 Note payable - bank 2,000,000


    Interest expense (2%*2m*6/12) 120,000
    Cash 2,120,000

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