Question

Camden Biotechnology began operations in September 2021. The following selected transactions relate to liabilities of the company for September 2021 through March 2022. Camden’s fiscal year ends on December 31. Its financial statements are issued in April. 2021 On September 5, opened checking accounts at Second Commercial Bank and negotiated a short-term line of credit of up to $20,000,000 at the bank's prime rate (9.5% at the time). The company will pay no commitment fees. On October 1, borrowed $17 million cash from Second Commercial Bank under the line of credit and issued a five-month promissory note. Interest at the prime rate of 9% was payable at maturity. Management planned to issue 10-year bonds in February to repay the note. Received $3,100 of refundable deposits in December for reusable containers used to transport and store chemical-based products. For the September–December period, sales on account totaled $4,190,000. The state sales tax rate is 3% and the local sales tax rate is 3%. (This is a summary journal entry for the many individual sales transactions for the period.) Recorded the adjusting entry for accrued interest. 2022 In March, paid the entire amount of the note on its March 1 due date, using proceeds from a February issuance of $12.8 million of 10-year bonds at face value, along with other available cash. The storage containers covered by refundable deposits are expected to be returned during the first nine months of the year. Half of the containers were returned in March 2022. Required: 1. Prepare the appropriate journal entries for items a-g. 2. Prepare the current and long-term liability sections of the December 31, 2021, balance sheet. Trade accounts payable on that date were $283,000.

Please can I have the answer

Answer 1

Part 1

No.	Transaction	General Journal	Debit	Credit
1	a	No journal entry required
2	b	Cash	17000000
		Notes payable		17000000
3	c	Cash	3100
		Liability—refundable deposits		3100
4	d	Accounts receivable	4441400
		Sales revenue		4190000
		Sales taxes payable		251400
5	e	Interest expense	382500
		Interest payable		382500
6	f-1	Cash	12800000
		Bonds payable		12800000
7	f-2	Interest expense	255000
		Interest payable	382500
		Notes payable	17000000
		Cash		17637500
8	g	Liability—refundable deposits	1550
		Cash		1550

Part 2

CAMDEN BIOTECHNOLOGY Partial Balance Sheet December 31, 2021
Current Liabilities:
Accounts payable	283000
Current portion of bank loan	4200000
Liability - refundable deposits	3100
Sales taxes payable	251400
Accrued interest payable	382500
Total current liabilities	5120000
Long-Term Liabilities:
Bank loan to be refinanced on a long-term basis	12800000

Sales taxes payable = ([3% + 3%] × $4,190,000) = $251,400

Interest expense = ($17,000,000 × 9% × 3/12) = $382,500

Interest expense = ($17,000,000 × 9% × 2/12) = $255,000

Cash = ($17,000,000 + 637,500) = $17,637,500