Question

CSO 2, T. AP a $9.000, 3-month Problems: Set B 555 P10-2B Majestic Mountain Bikes markets mountainbike our in various locations in the mountains of Colorado in clients vacationing Jouse and post mode ner biking season, Majestic entered into the following transactions related to notes payable art for the ring sumtransactions Sew balance Mar. 1 Purchased Puma bikes for use as rentals by issuing a $9,000, 3-month. 6% note payable that is due June 1. Mar. 31 Recorded accrued interest for the Puma note. Apr. 1 issued a $45.000 9-month note for the purchase of mountain property on which to build bike trails. The note hears 89e interest and is due January 1 Apr 30 Recorded accrued interest for the Puma note and the land note. May 1 Issued a 4-month note to Jackson State Bank for $12.000 at 6%. The funds will be used for working capital for the beginning of the season, the note is due September 1. May 31 Recorded accrued interest for all three notes. June 1 Paid principal and interest on the Puma note. June 30 Recorded accrued interest for the land note and the Jackson State Bank note. Instructions (a) Prepare journal entries for the transactions noted above. (b) Interest Payable $1,020 (b) Post the above entries to the Notes Payable, Interest Payable, and Interest Expense accounts. (Use T accounts.) (c) Assuming that Majestic's year-end is June 30, show the balance sheet presentation of notes payable and interest payable at that date. d) How much interest expense relating to notes payable did Majestic incur during the year? Prepare journal entrie P10-3B The following section is taken from Lois Corp.'s balance sheet at December 31, record interest payme redemption of bonds (S0 5,6), AP Current liabilities 2011. $ 84,000 Interest payable

P 10 2 b please help

Answer 1

a

Date	Accounts	Debit	credit
Mar-01	Equipment (Puma Bikes)	9000
	Notes payable		9000
Mar-31	Interest expense	45
	interest payable		45
	(9000*6%*1/12)
Apr-01	Land	45000
	Notes payable		45000
Apr-30	Interest expense	345
	interest payable		345
	(9000*6%*1/12)
	(45000*8%*1/12)
May-01	cash	12000
	notes payable		12000
May-31	Interest expense	405
	interest payable		405
	(9000*6%*1/12)
	(45000*8%*1/12)
	(12000*6%*1/12)
Jun-01	Notes payable	9000
	Interest payable	135
	cash		9135
Jun-30	Interest expense	360
	interest payable		360
	(45000*8%*1/12)
	(12000*6%*1/12)

b.

Notes Payable
Jun-01	9000	Mar-01	9000
		Apr-01	45000
		May-01	12000
		balance	57000
Interest Payable
Jun-01	135	Mar-31	45
		Apr-30	345
		May-31	405
		Jun-30	360
		balance	1020

Interest Expense
Mar-31	45
Apr-30	345
May-31	405
Jun-30	360
balance	1155

c.

Balance sheet
Current Liabilities
Notes payable	57000
Interest payable	1020	58020

d.

d.Interest expense

1155