10-2 BRIEF EXERCISES BE10-1 Jamison Company has the following obligations at Dec

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10-2

BRIEF EXERCISES BE10-1 Jamison Company has the following obligations at December 31: (a) a note pay- Identify whether able for $100,000 due in 2 years, (b) a 10-year mortgage payable of $300,000 payable in ten are current liabi $30,000 annual payments, (c) interest payable of $15,000 on the mortgage, and (d) accounts (LO 1) payable of $60,000. For each obligation, indicate whether it should be classified as a current liability. (Assume an operating cycle of less than one year:) BE10-2 Peralta Company borrowS S60,000 on July 1 from the bank by signing a $60,000, 10%, one-year note payable. a) Prepare the journal entry to record the proceeds of the note (b) Prepare the journal entry to record accrued interest at December 31, assuming adjust- Prepare entries bearing note p (LO 1) ing entries are made only at the end of the year. BE10-3 Coghlan Auto Supply does not segregate sales and sales taxes at the time of sale. The register total for March 16 is $16,380. All sales are subject to a 5% sales tax. Com- pute sales taxes payable, and make the entry to record sales taxes payable and sales Compute and taxes payabl (Lo 1) revenue. BE10-4 Derby University sells 4,000 season basketball tickets at $210 each for its 12-game Prepare ent home schedule. Give the entry to record (a) the sale of the season tickets and (b) the revenues. revenue recognized by playing the first home game (LO 1)

Explanation / Answer

Journal entry :

Date account and explanation debit credit July 1 Cash 60000 Notes payable 60000 (To record amount borrowed) Dec 31 Interest expense (60000*10%*6/12) 3000 Interest payable 3000 (To record accured interest)

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