Exam 11: Current Liabilities and Payroll Accounting

The entry to record the issuance of an interest-bearing note credits Notes Payable for the note's

The human resources department documents and authorizes employment of new employees.

Kelly Rice has a large consulting practice. New clients are required to pay one-half of the consulting fees up front. The balance is paid at the conclusion of the consultation. How does Rice account for the cash received at the end of the engagement?

Delaney Company sells a product that includes a one-year warranty on parts and labor. During the year, 10,000 units are sold. Delaney expects that 3% of the units will be defective and that the average warranty cost will be $50 per unit. Actual warranty costs incurred during the year were $14,000. Instructions Prepare the journal entries to record (a) the estimated warranty costs and (b) the actual costs incurred.

Notes payable usually require the borrower to pay interest.

Layton Company does not ring up sales taxes separately on the cash register. Total receipts for October amounted to $18,900. If the sales tax rate is 5%, what amount must be remitted to the state for October's sales taxes?

Hilton Company issued a four-year interest-bearing note payable for $300,000 on January 1, 2009. Each January the company is required to pay $75,000 on the note. How will this note be reported on the December 31, 2010 balance sheet?