The following are selected 2007 transactions of Sean Astin Corporation.
Oct 1 Issued a $50,000, 12-month. 8% note to Encion in payment of account.
Oct. 1 Borrowed $50,000 from the Shore Bank by signing a 12-month, zero-interest-bearing $54,000 note.
(a) Prepare journal entries for the selected transactions above.
(b) Prepare adjusting entries at December 31
(c) Compute the total net liability to be reported on the December 31 balance sheet for:
(1) the interest bearing note
(2) the zero-interest-bearing note
Remit in excel
Please see the attached file
Sept. 1 Purchases 50,000 Under periodic system it will be recorded under purchases
Accounts Payable 50,000
Oct. 1 Accounts Payable 50,000 The accounts payable is exchanged for ...
The solution explains the journal entries for the transactions and the adjusting entries. It also explains how to calculate the ending balance for interest bearing and zero interest notes.