The following are selected 2014 transactions of
Sean Astin Corporation.
E13-2 (Accounts and Notes
Payable) The following are selected 2014 transactions of Sean Astin Corporation.
Sep 1 Purchased inventory from Encino Company on
account for $50,000 Astin records purchases gross and uses a periodic inventory
system
Oct 1 Issued a $50,000 12-month, 8% note to Encino
in payment of account.
Oct 1 Borrowed $50,000 from the Shore Bank by
signing a 12-month, zero-interest- bearing $54,000 note
Instructions
(a)
Prepare journal entries for the selected transactions above.
(b) Prepare
adjusting entries at December 31.
(c) (1)
Compute the total net liability to be reported on the December 31 balance sheet
for the interest bearing note.
(c) (2) Compute
the total net liability to be reported on the December 31 balance sheet for the
zero-interest-bearing note.
SOLUTION
PREVIEW
(a)
Prepare journal entries for the selected transactions above.
|
Sep 1
|
Purchases
|
50,000
|
|
|
Accounts Payable
|
|
50,000
|
