Majesty Productions accepted a $7,200, 120-day, 6% note from Swartz Studio on March 1. On the date the note matures, Swartz is u
nable to pay, but Majesty intends to continue collection efforts. What entry should Majesty record on the maturity date for this dishonored note?
2 answers:
Answer:
Check the explanation
Explanation:
The accounting entry (which is an official record/book that documents a transaction of the day to day activities of a business. In most cases, an entry is prepared through the principles of the double entry bookkeeping system, which involves one to create both a debit and credit entry, and which ultimately leads to the creation of a comprehensive set of financial statements.) for Majesty record on the maturity date for this dishonored note is in the attached image below:
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Answer:
Explanation:
Before passing the journal entry , first we have to compute the depreciation amount under straight line method.
The formula to compute depreciation expense is shown below:
=
=
= $1,800
The journal entry is shown below:
Jan 1 Equipment A/c Dr $10,000
To cash $10,000
(Being equipment is purchased)
Jan 31 Depreciation expense A/c Dr $1,800
To Accumulated depreciation $1,800
(Being depreciation expense recorded)