For Each Independent Situation

question 33

Essay

For each independent situation:
1. Langford Airport Parking Ltd. awards customers 250 reward miles per stay, in a well-known airline mileage program. Langford pays the airline $0.06 for each mile. Langford, which is not an agent for the airline, estimates that the fair value of the miles is the same as the price paid-$0.06. Parking revenues on May 24, 2020 were $52,000. Langford awarded 40,000 airline points to its customers.
2. On October 15, 2020, Hamilton Windows and Sash properly recorded the issue of a $12,000, 7% note due April 15, 2021. Hamilton is preparing its financial statements for the year ended December 31, 2021. Hamilton does not make adjusting entries during the year.
Required:
For each of the situations described above, prepare the required journal entry for the underlined entity. If a journal entry is not required, explain why.

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Definitions:

Ethical Reason

A justification for an action or decision based on moral principles and values.

Equitable Remedy

A court-ordered action that requires a party to take specific steps to correct a wrong, including injunctions and specific performance, distinguished from financial compensation.

Specific Performance

A contract remedy whereby the defendant is ordered to perform according to the terms of his contract.

Monetary Damages

Financial compensation awarded in civil lawsuits for loss or injury as a result of the defendant's actions.