Please help by showing how to get each number. Will rate. E13-2 (L01) EXCEL (Acc
ID: 2580231 • Letter: P
Question
Please help by showing how to get each number. Will rate.
E13-2 (L01) EXCEL (Accounts and Notes Payable) The following are selected 2017 transactions of Sean Astin Corporation Sept. 1 Purchased inventory from Encino Company on account for $50,000. Astin records purchases gross and uses a periodic inventory system Issued a $50,000, 12-month, 8% note to Encino in payment of account. Oct. 1 Oct.1 Borrowed $50,000 from the Shore Bank by signing a 12-month, zero-interest-bearing $54,000 note. Instructions nal l 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) (2) The interest-bearing note. The zero-interest-bearing note.Explanation / Answer
Answer:
(a)
Prepare journal entries for the selected transactions above.
date
Description
Debit $
Credit $
1-Sep
Purchases
50000
Accounts Payable
50000
1-Oct
Accounts Payable
50000
Notes Payable
50000
1-Oct
Cash
50000
Discount on Notes Payable
4000
Notes Payable
54000
________________________________________
(b)
Prepare adjusting entries at December 31.
date
Description
Debit $
Credit $
31-Dec
Interest Expense
[$50,000 × 8.00% × (3/12)]
1000
Interest Payable
1000
31-Dec
Interest Expense
1000
Discount on Notes Payable
[4,000 × (3/12)]
1000
______________________________________
(c)
(1) the interest-bearing note.
Compute the total net liability to be reported on the December 31 balance sheet
Note payable
$50,000
Interest payable
1,000
$51,000
_______________________________________________________
(c) (2)
the zero-interest- bearing note.
Compute the total net liability to be reported on the December 31 balance sheet
Note payable
$54,000
Less discount ($4,000 - $1,000)
3,000
$51,000
date
Description
Debit $
Credit $
1-Sep
Purchases
50000
Accounts Payable
50000
1-Oct
Accounts Payable
50000
Notes Payable
50000
1-Oct
Cash
50000
Discount on Notes Payable
4000
Notes Payable
54000
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