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Current Liability Transactions

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Use account titles for the transactions: Cash, Accounts Payable, Notes Payable, Interest Payable, Unearned Ticket Revenue, Ticket Revenue, Supplies Expense, Discount, and Interest Expense.

Scenario 1: On April 1, 2009 Williams Company borrowed $100,000 from National Bank. The note is a 10%, nine month note. Interest accrues quarterly. The total principal and interest will be paid December 31, 2009. Record the entries for April 1, the quarterly accruals and the payment on 12/31/09.

Scenario 2: Midwest University sells 5,000 season baseball tickets at $25 each for its five-game home schedule. Record the entries for the sale of the tickets and the entry after its first home game.

Scenario 3: Willams Company is on credit with its major supplier. On May 1, they purchased $10,000 in supplies on credit. The terms are 2/10, net 30. They make the payment on May 10, to take advantage of the discount. Record the entry for the payment on 5/10.

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Solution Summary

Solution provides a table that documents the payments made in each of the scenarios, summarizing the particulars of each.

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