1. On December 24, 2019, a computer was purchased on account from Computers International for $60,000. Terms of the sale were 2/10, n/30. 2. Byrd calculated that to forgo the discount for the computer would be the equivalent of paying 36% interest annually for the extra 20 days. Therefore, Byrd went to First Local Bank and signed a $60,000, 30-day note at 12% in order to take advantage of the discount terms. This transaction took place on December 29, 2019. (The account payable was paid on January 2, 2020, and the note was paid at maturity. Assume a 360-day year.) 3. On December 30, 2019, Byrd declared a $2.00 cash dividend to the common shareholders. Ten thousand shares were outstanding on this date. The dividend is to be paid on January 5, 2020.

1. On December 24, 2019, a computer was purchased on account from Computers International for $60,000. Terms of the sale were 2/10, n/30. 2. Byrd calculated that to forgo the discount for the computer would be the equivalent of paying 36% interest annually for the extra 20 days. Therefore, Byrd went to First Local Bank and signed a $60,000, 30-day note at 12% in order to take advantage of the discount terms. This transaction took place on December 29, 2019. (The account payable was paid on January 2, 2020, and the note was paid at maturity. Assume a 360-day year.) 3. On December 30, 2019, Byrd declared a $2.00 cash dividend to the common shareholders. Ten thousand shares were outstanding on this date. The dividend is to be paid on January 5, 2020.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 10MC: On January 1, 2019, Park Company accepted a 36,000, non-interest-bearing, 3-year note from a major...

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