1) Prepare journal entries for the transactions noted above. 2) Post the above e

Question

1) Prepare journal entries for the transactions noted above.
2) Post the above entries to the Notes Payable, Interest Payable, and Interest Expense accounts.
3) Show the Balance Sheet presentation of Notes Payable and Interest Payable at December 31
4) How much interest expenses relating to Notes Payable did Culvir incur during the year??

Problem 10-2A Culver Corporation sells rock climbing products and also operates an indoor climbing facility for dimbing enthusiasts. During the last part of 2017, culver had the following transactions related to notes payable Sept. 1 issued a $15.600 note to Pippen to purchase inventory. The 3 month note payable bears interest of 9% and is due December 1. caher usns . perpetual inventory system. Sept, 30 Recorded accrued interest for the Pippon note Oct. 1 Oct. 31 No. 1 Nov. 30 Issued a $19,200, 10%, 4-month note to Prime Bank to finance the purchas of a new climbing wall for advanced cirnbers. The note is due February 1 Recorded accrued interest for the Pippen note and the Prime Bank note Issued a 24,000 note and paid S 9,200 cash to purchase a vehicle to transport clients to nearby climbing sites a5 part of ? new series of dimbing classes This note bears interest of 8% and matures in 12 months. Recorded accrued interest for the Pippen note, the Prime Bank note, and the vehicle note. Dec. 1 Paid principal and interest on the Pippen note. Dec. 31 Recorded accrued interest for the Prime Bank note and the vehide note. Prepare journal entries for the transactions noted above.(Credit account tities are outomatically indented when amount is entered. Do not indent manualy. Aecord journal entries in the order presented in the problem.)

Explanation / Answer

Date Account titles & Explanations Debit Credit 1-Sep merchandise invnetory 15,600 notes payable 15,600 30-Sep interest expense 117 interest payable 117 (15600*9%*1/12) 1-Oct Equipment 19,200 notes payable 19,200 31-Oct interest expense 277 interest payable 277 (117+19200*10%*1/12) 1-Nov Equipment 33,200 notes payable 24,000 cash 9,200 30-Nov interest expense 437 interes payable 437 (117+160+24000*8%*1/12) 1-Dec notes payable 15600 interest payable 321 cash 15921 31-Dec interest expense 320 interest payable 320 T-accounts notes payable 1-Dec 15,600 1-Sep 15,600 1-Oct 19200 1-Nov 24,000 end bal 43200 interest payable 1-Dec 321 30-Sep 117 31-Oct 277 30-Nov 437 31-Dec 320 end bal 830 interest expense 30-Sep 117 31-Oct 277 30-Nov 437 31-Dec 320 end bal 1151 3) Balance Sheet Presentation current liabilties notes payable 43,200 interest payable 830 total current liabilities 44,030 4) total interest expene 1151

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