Professional Documents
Culture Documents
Be. 252
On April 1, Holton Company borrows $80,000 from West Bank by signing a 6-month, 6%,
interest-bearing note.
Instructions
Prepare the necessary entries below associated with the note payable on the books of
Nolton Company. Date
(a)Prepare the entry on April 1 when the note was issued. Apr-01
(b)Prepare any adjusting entries necessary on June 30 in order to prepare the semiannual
financial statements. Assume no other interest accrual entries have been made.
Be. 253
Peterson Company billed its customers a total of $735,000 for the month of November. The
total includes a 5% state sales tax.
Instructions Date
(a)Determine the proper amount of revenue to report for the month. Jun-30
(b)Prepare the general journal entry to record the revenue and related liabilities for the
month.
Be. 254
Manuel Company had cash sales of $65,100 (including taxes) for the month of June. Sales
are subject to 8.5% sales tax. Prepare the entry to record the sale.
Be. 255
Mantle Publications publishes a golf magazine for women. The magazine sells for $4.00 a
copy on the newsstand. Yearly subscriptions to the magazine cost $36 per year (12 issues).
During December 2011, Expert Publications sells 4,000 copies of the golf magazine at
newsstands and receives payment for 5,000 subscriptions for 2012. Financial statements are
prepared monthly.
Instructions
(a)Prepare the December 2011 journal entries to record the newsstand sales and
subscriptions received.
(b)Prepare the necessary adjusting entry on January 31, 2012. The January 2012 issue has
been mailed to subscribers.
S.No
1
Date
Jan-31
Answer 251
Current liabilities
Accounts Payable $ 57,000
Notes Payable $ 50,000
Mortgage payable-current portion $ 15,000
Sales taxes payable $ 38,000
Accumulated Depreciation-Equipment $ 14,000
Interest payable $ 3,000
$ 177,000
Answer 252-a
Answer 252-b
Accounts Title Debit Credit
Interest expense $ 1,200
Answer 254
Cash $ 65,100
Sales $ 60,000 ($ 65,100/108.5*100)
Cash $ 180,000
Unearned Subscriptions Revenue $ 180,000
(5,000 subscriptions *$ 36 per year)
Answer 255-b
Accounts Title Debit Credit
Unearned Subscriptions Revenue $ 15,000
Subscriptions Revenue $ 15,000
($ 180,000/12 months * 1 month)