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8090 [49]
3 years ago
13

On September​ 1, Advantage Maintenance Company contracted to provide monthly maintenance services for the next five months at a

rate of​ $3,000 per month. The client paid Advantage​ $15,000 on September 1. The maintenance services began on that date. Assuming Advantage records deferred revenues using the alternative​ treatment, what would be the adjusting entry recorded on December​ 31?
Business
1 answer:
sveta [45]3 years ago
4 0

Answer:

Adjusting Entry

December 31,

Dr. Service Revenue     $3,000

Cr. Unearned Revenue $3,000

Explanation:

Using alternate treatment the cash received in advance is recorded as the revenue initially.

On September following entry was performed

Dr. Cash        $15,000

Cr. Revenue $15,000

At the end of the year services of 4 months have been performed and the amount of one month's service is received in advance until this date. It needs to be adjusted according to the accrual concept.

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On June 8, Williams Company issued an $80,000, 5%, 120-day note payable to Brown Industries. Assuming a 360-day year, what is th
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Answer:

$81,333

Explanation:

Williams company issued an principal of $80,000

The principal was issued at a 5% rate

The time period is 120-day payable to Brown industries.

The first step is to calculate the interest

Interest= principal × rate × time

= $80,000×0.05×(120/360)

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Maturity value= Interest+principal

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= $81,333.2

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Hence the maturity value on the note is $81,333

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