Chapter 12, Problem 12.17E

Accounting for long-term notes payable transactions

Consider the following note payable transactions of Caldwell Video Productions.

2016
Apr. 1	Purchased equipment costing $56,000 by issuing a seven-year, 13% note payable. The note requires annual principal payments of $8,000 plus interest each April 1.
Dec. 31	Accrued interest on the note payable.
2017
Apr. 1	Paid the first installment on the note.
Dec. 31	Accrued interest on the note payable.

Requirements

1. Journalize the transactions for the company.

2. Considering the given transactions only, what are Caldwell Video Productions’ total liabilities on December 31, 2017?