CH 10 [PDF]

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MC10



MATCHA CREATIONS



Mei-ling is thinking of repaying all amounts outstanding to her grandmother. Recall that Matcha Creations borrowed NT$2,000 on November 16, 2017, from Mei-ling’s grandmother. Interest on the note is 6% per year, and the note plus interest was to be repaid in 24 months. Recall that a monthly adjusting journal entry was prepared for the months of November 2017 (1/2 month), December 2017, and January 2018. Instructions (a) Calculate the interest payable that was accrued and recorded to July 31, 2018, assuming monthly adjusting entries were made. (b) Prepare the journal entry at August 31, 2018, to record one month’s accrued interest. (c) Mei-ling repays her grandmother on September 15, 2018—10 months after her grandmother extended the loan to Matcha Creations. Prepare the journal entry for the loan repayment.



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Weygandt Financial Accounting IFRS 3e Matcha Creations