{"id":186554,"date":"2025-01-25T09:08:43","date_gmt":"2025-01-25T09:08:43","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=186554"},"modified":"2025-01-25T09:08:45","modified_gmt":"2025-01-25T09:08:45","slug":"rob-judson-company-had-the-following-transactions-involving","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/01\/25\/rob-judson-company-had-the-following-transactions-involving\/","title":{"rendered":"Rob judson company had the following transactions involving"},"content":{"rendered":"\n<p>Rob judson company had the following transactions involving<\/p>\n\n\n\n<p>Rob Judson Company had the following transactions involving notes payable.<br>July 1, 2010 Borrows $50,000 from Third National Bank by signing a 9-month, 12% note.<br>Nov. 1, 2010 Borrows $60,000 from DeKalb State Bank by signing a 3-month, 10% note.<br>Dec. 31, 2010 Prepares adjusting entries.<br>Feb. 1, 20011 Pays principal and interest to DeKalb State Bank<br>Apr. 1, 20011 Pays principal and interest to Third National Bank<br>Instructions<br>Prepare journal entries for each of the transactions.\u00c2<\/p>\n\n\n\n<p>Rob judson company had the following transactions involving<br>Accounting Basics<\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-ast-global-color-6-color\"><strong>The Correct Answer and Explanation is :<\/strong><\/mark><\/p>\n\n\n\n<p>Here are the journal entries for each of the transactions involving notes payable for Rob Judson Company:<\/p>\n\n\n\n<p><strong>1. July 1, 2010: Borrows $50,000 from Third National Bank by signing a 9-month, 12% note.<\/strong><\/p>\n\n\n\n<p><strong>Journal Entry:<\/strong><\/p>\n\n\n\n<pre class=\"wp-block-code\"><code>   Debit: Cash                       $50,000\n   Credit: Notes Payable             $50,000<\/code><\/pre>\n\n\n\n<p>Explanation: The company borrows $50,000 from Third National Bank and signs a 9-month note. The cash received is debited, and the notes payable liability is credited.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>2. Nov. 1, 2010: Borrows $60,000 from DeKalb State Bank by signing a 3-month, 10% note.<\/strong><\/p>\n\n\n\n<p><strong>Journal Entry:<\/strong><\/p>\n\n\n\n<pre class=\"wp-block-code\"><code>   Debit: Cash                       $60,000\n   Credit: Notes Payable             $60,000<\/code><\/pre>\n\n\n\n<p>Explanation: The company borrows an additional $60,000 from DeKalb State Bank. The journal entry recognizes the cash inflow and the liability for the note payable.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>3. Dec. 31, 2010: Prepares adjusting entries.<\/strong><\/p>\n\n\n\n<p><strong>Adjusting Entry for Third National Bank Note (9-month, 12%):<\/strong><\/p>\n\n\n\n<p>First, we calculate the interest for 6 months (July 1 to December 31):<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Interest = $50,000 \u00d7 12% \u00d7 (6\/12) = $3,000<\/li>\n<\/ul>\n\n\n\n<pre class=\"wp-block-code\"><code>   Debit: Interest Expense            $3,000\n   Credit: Interest Payable           $3,000<\/code><\/pre>\n\n\n\n<p><strong>Adjusting Entry for DeKalb State Bank Note (3-month, 10%):<\/strong><\/p>\n\n\n\n<p>We calculate the interest for 2 months (November 1 to December 31):<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Interest = $60,000 \u00d7 10% \u00d7 (2\/12) = $1,000<\/li>\n<\/ul>\n\n\n\n<pre class=\"wp-block-code\"><code>   Debit: Interest Expense            $1,000\n   Credit: Interest Payable           $1,000<\/code><\/pre>\n\n\n\n<p>Explanation: The adjusting entries are necessary to recognize the accrued interest on both notes payable as of December 31, 2010. Interest expense is recognized and interest payable is credited for both notes.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>4. Feb. 1, 2011: Pays principal and interest to DeKalb State Bank.<\/strong><\/p>\n\n\n\n<p>The company pays off the DeKalb State Bank note, including both principal and interest. The principal is $60,000, and the interest for 3 months is:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Interest = $60,000 \u00d7 10% \u00d7 (3\/12) = $1,500<\/li>\n<\/ul>\n\n\n\n<p><strong>Journal Entry:<\/strong><\/p>\n\n\n\n<pre class=\"wp-block-code\"><code>   Debit: Notes Payable              $60,000\n   Debit: Interest Payable            $1,000 (from Dec 31, 2010)\n   Debit: Interest Expense            $500 (additional interest for Jan)\n   Credit: Cash                       $61,500<\/code><\/pre>\n\n\n\n<p>Explanation: The principal is paid off along with the interest due, which includes the accrued interest from the previous period and the new month&#8217;s interest.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>5. Apr. 1, 2011: Pays principal and interest to Third National Bank.<\/strong><\/p>\n\n\n\n<p>The company pays off the Third National Bank note, which is a 9-month note. By this time, 8 months of interest has accrued. The interest for 9 months is:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Interest = $50,000 \u00d7 12% \u00d7 (9\/12) = $5,400<\/li>\n<\/ul>\n\n\n\n<p><strong>Journal Entry:<\/strong><\/p>\n\n\n\n<pre class=\"wp-block-code\"><code>   Debit: Notes Payable              $50,000\n   Debit: Interest Payable            $3,000 (from Dec 31, 2010)\n   Debit: Interest Expense            $2,400 (additional interest for Jan-Feb-Mar)\n   Credit: Cash                       $53,400<\/code><\/pre>\n\n\n\n<p>Explanation: The company pays off the principal along with the interest due. The payment includes the accrued interest at the end of 2010, plus the interest from January to March.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\">Summary Explanation:<\/h3>\n\n\n\n<p>In each of the journal entries above, the company is recording the borrowing of money, the recognition of interest expense as it accrues, and the payment of principal and interest at the maturity dates. Adjusting entries are made to ensure that the financial statements accurately reflect the company&#8217;s financial position, particularly regarding the interest payable at year-end.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Rob judson company had the following transactions involving Rob Judson Company had the following transactions involving notes payable.July 1, 2010 Borrows $50,000 from Third National Bank by signing a 9-month, 12% note.Nov. 1, 2010 Borrows $60,000 from DeKalb State Bank by signing a 3-month, 10% note.Dec. 31, 2010 Prepares adjusting entries.Feb. 1, 20011 Pays principal [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-186554","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/186554","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=186554"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/186554\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=186554"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=186554"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=186554"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}