Pane accrues interest on the note signed by Gane on April 1 (see Transaction #7)....

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Accounting

Pane accrues interest on the note signed by Gane on April 1 (see Transaction #7). Assume interest is assessed based on months.

#7 On April 1, Pane makes a credit sale to Gane Co. and requires Gane to sign a $50,000, 2-year (24-month) note. Interest of 12% is to be assessed in addition to the face value of the note and collected at maturity. The cost of the inventory sold totals $38,000. Remember, Pane uses the perpetual inventory system.

Make Journal Entry using accounts listed below

Dr.

Cr.

Cash
Investment in Available-for-Sale Securities
Allowance for Change in Fair Value of Available-for-Sale Investments
Investment in Equity Securities
Accounts Receivable
Allowance for Doubtful Accounts
Consulting Services Contract Asset
Inventory
Prepaid Rent
Notes Receivable
Interest Receivable
Machinery
Accumulated Depreciation - Machinery
Equipment Leased to Others
Accumulated Depreciation - Equip. Leased to Others
Leased Equipment
Accumulated Depreciation - Leased Equip.
Buildings
Accumulated Depreciation - Building
Land
Patents
Accumulated Amortization
Goodwill
Deferred Tax Assets
Accounts Payable
Salaries Payable
Employee Income Tax Withholding Payable
Federal Unemployment Tax Payable
State Unemployment Tax Payable
F.I.C.A. Tax Payable
Dividends Payable - Common Stock
Dividends Payable - Preferred Stock
Income Tax Payable
Interest Payable
Liability for Compensated Absences
Accrued Loss on Purchase Commitment
Fines and Penalties Liability
Bonds Payable
Discount on Bonds Payable
Premium on Bonds Payable
Finance Lease Obligation
Deferred Tax Liabilities
Common Stock
Additional Paid in Capital - Common Stock
Preferred Stock
Additional Paid in Capital - Preferred Stock
Retained Earnings
Treasury Stock
Unrealized Gain/Loss: Available-for-Sale Securities
Dividends Declared
Income Summary
Sales and Service Revenue
Interest Revenue
Rental Revenue
Unrealized Gain/Loss: Equity Securities
Realized Gain/Loss: Available-for-Sale Securities
Cost of Goods Sold
Depreciation Expense - Building
Depreciation Expense - Equip. Leased to Others
Depreciation Expense - Leased Equipment
Depreciation Expense - Machinery
Amortization Expense
Bad Debt Expense
Income Tax Expense
Insurance Expense
Interest Expense
Payroll Tax Expense
Rent Expense
Research & Development Expense
Salaries Expense
Loss Due to Fines and Penalties
Loss on Impairment
Loss on Purchase Commitment

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