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Many businesses borrow money during periods of increased business activity to finance inventory and accounts receivable. Target Corporation is one of America’s largest general merchandise retailers. Each Christmas, Target builds up its inventory to meet the needs of Christmas shoppers. A large portion of Christmas sales are on credit. As a result, Target often collects cash from the sales several months after Christmas. Assume that on November 1, 2015, Target borrowed $6 million cash from Metropolitan Bank and signed a promissory note that matures in six months. The interest rate was 8.0 percent payable at maturity. The accounting period ends December 31.
Required:
1,2&3.

Complete the required journal entries to record the note on November 1, 2015, interest on the maturity date, April 30, 2016, assuming that interest has not been recorded since December 31, 2015. (Enter your answers in whole dollars. If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Journal Entry Worksheet:

1.) Record the borrowing of $6,000,000.

2.) Record the interest accrued on the note payable as of December 31, 2015.

3.) Record the repayment of the note plus interest on the maturity date.

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Nestor Rutherford
Nestor RutherfordLv2
28 Sep 2019

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ABC Corporation of Puerto Rico sellsall types of name brand electronic equipment like computers, faxmachines, cameras and more. The company started operations onOctober 1, 2015; uses the net price method to record itsmerchandise, uses a perpetual inventory system, closes itsbooks on December 31, and publishes its Annual Report byMarch 31 of each year.

On October 1, 2015, purchased, on credit, 2,000 units ofmerchandise at $500 each.Terms of the purchase were 2/10,n/120.Paid for 20% of these units on October 9, 2015 and theremaining 80% on January 2016.

On January, 2016 ABC entered into an agreement with its supplierto pay half of the amount owed using ABC’s common stocks.The otherhalf was paid with cash.

On December 1, 2015, purchased merchandise for $25,000, andissued a12%, 120-day note to XYZ.

On November 16, 2015, borrowed $20,000 from the Last Bank byissuing a 90 day, non-interest –bearing note.The bank discountedthis note at 12% and remitted to ABC the difference.

On October 30, 2015, acquired new equipment and signed a12-month note for $24,000. The face value of the note includes theprice of the equipment and interests. The note is paid in four$6,000 quarterly installments. The value of the equipment is thepresent value of the four quarterly payments discounted at anannual interest rate of 16%.

During the last quarter of 2015, the company had the followingsummary transactions:

Cash sales of $210,000, subject to sales taxes of 6%.

Sales on credit of $260,000, subject to sales taxes of 6%.

These taxes were paid on 2016.

The payroll for 2015 was as follows:

Total payroll, $177,000

Payroll in excess of $118,500, $2,500

Payroll in excess of $9,000, $153,000

Payroll in excess of $7,000, $157,000

No salaries are subject to the Additional Medicare Tax of0.9%.

Income taxes withheld, $27,357

Union dues withheld, $10,000

The company pays the state unemployment taxes in full, on time,and on all the same wages as are subject to FUTA tax.

During its first quarter of operations the company sold giftcertificates totaling $4,000. By December 31, 2015 all but $750worth of these certificates had been redeemed.Outstandingcertificates were redeemed by January 5, 2016.

On December 25, 2015, ABC learned that one of its competitors isselling in Puerto Rico a product over which ABC has exclusiverights to sell in the Caribbean.ABC filed suit against thecompetitor and in all likelihood, its attorneys felt, ABC shouldrecover at least $500,000.

REQUIRED:

Compute ABC Electronics TOTAL CURRENTLIABILITIES for 2015. Show all necessary computations.

please Help! :(

PART A: Nittany Lions Corporation adjusts itsaccounts only at year-end. The following information is availableas a source for preparing adjusting entries at December 31,2015.

On November 1, 2015, the company borrowed $120,000 for one yearat 9% interest and recorded a full yearof accrued interest expense. Interest is payable at maturity.

On October 1, 2015, Nittany Lions collected seven month’s rentin the amount of $10,500 in advance from the renter. At that date,the company debited Cash and credited Unearned Rent Revenue for$10,500.

The Supplies Inventory account had a $4,500 balance at thebeginning of the year (January 1, 2015). During the year, $6,000 ofsupplies were acquired, with the Supplies Expense account debitedat the time of purchase. The supplies count at the end of the year(December 31, 2015) showed $5,000 of supplies is still on hand.

The company owes 6-month property taxes of $1,500 on land ownedfor 2015. The taxes will be paid when they are billed in February2016. No related expense has been recorded.

Required:

For each of the above numbered items, prepare the necessaryadjusting journal entry. If no adjusting entry is required, explainwhy. Put the adjusting journal entries in the worksheet titled“Part A Answers to Part A.”

If Nittany Lions failed to prepare necessaryadjusting entries like you did in Requirement A, indicate theeffect that each item will have on the company’s financialstatements for the year ended December 31, 2015. UseO for overstated, U forunderstated, and NE for no effect. Organize youranswer in tabular form, using the column headings shown below andprovided in the worksheet titled “Part A Answers to Part B.”

Example 0: At year end, employees earned $4,000in wages which will be paid on the next payroll date in January2016. The adjusting journal entry will be:

Rent Expense (+E, -NI, -R/E,-SE) 4,000

Salaries Payable(+L) 4,000

Required:

1. Record the transactions in the company’s general journal. Use daysin any interest accrual calculations, not months. Round all resultsto the nearest whole dollar.

The following transactions of Tech Source of Boston,Massachusetts, occurred during 2013 and 2014. The company’syear-end is December 31.

2013

Mar.3 – Purchased a machine for $66,000 plus 5% GST, signing asix-month, 3% note-payable.

Mar. 31 – Recorded the month’s sales of $134,500, one-quarterfor cash, and three-quarters on credit. All sales amounts aresubject to 5% GST, to be calculated on the sales of $134,500.

Apr. 7 – Paid March’s GST to the Receiver General

May. 31 – Borrowed $75,000 with a 5% note payable that calls forannual installment payments of $15,000 principal plus interest.

Sept 3. – Paid the six-month, 3% note at maturity

Sept 30. – Purchased inventory at a cost of $25,000 plus GST,signing a 5%, six-month note payable for that amount.

Dec. 31 – Accrued warranty expense, which is estimated at 3% ofannual sales of $1,445,000

Dec. 31 -Accrued interest on all outstanding notes payable. Makea separate interest accrual entry for each note payable.

2014

Mar. 31 – Paid off the 5% inventory note, plus interest, atmaturity.

May – Paid the first installment and interest for one year onthe long-term note payable.

General Journal

DATE
2013

ACCOUNT TITLES AND EXPLANATIONS

POST. REF.

DEBIT

CREDIT

General Journal

DATE
2014

ACCOUNT TITLES AND EXPLANATIONS

POST. REF.

DEBIT

CREDIT

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