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The following are selected 2020 transactions of Astin Corporation.   Sept. 1 Purchased inventory from Encino Company on account for $50,000. Astin records purchases gross and uses a periodic inventory system.   Oct.  1 Issued a $50,000, 12-month, 8% note to Encino in payment of account.   Oct.  1 Borrowed $50,000 from the Shore Bank by signing a 12-month, zero-interest-bearing $54,000 note. Instructions a.   Prepare journal 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.   The interest-bearing note. 2.   The zero-interest-bearing note.

The following are selected 2020 transactions of Astin Corporation.   Sept. 1 Purchased inventory from Encino Company on account for $50,000. Astin records purchases gross and uses a periodic inventory system.   Oct.  1 Issued a $50,000, 12-month, 8% note to Encino in payment of account.   Oct.  1 Borrowed $50,000 from the Shore Bank by signing a 12-month, zero-interest-bearing $54,000 note. Instructions a.   Prepare journal 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.   The interest-bearing note. 2.   The zero-interest-bearing note.

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter9: Current Liabilities And Contingent Obligations
Section: Chapter Questions
Problem 2RE: Use the same information in RE9-1 except that the note is not interest bearing. Assume that the note...
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The following are selected 2020 transactions of Astin Corporation.

  Sept. 1 Purchased inventory from Encino Company on account for $50,000. Astin records purchases gross and uses a periodic inventory system.
  Oct.  1 Issued a $50,000, 12-month, 8% note to Encino in payment of account.
  Oct.  1 Borrowed $50,000 from the Shore Bank by signing a 12-month, zero-interest-bearing $54,000 note.

Instructions

a.   Prepare journal 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.   The interest-bearing note.

2.   The zero-interest-bearing note.

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