Question

> Problems Group A 12-32A Journaling liability transactions and reporting them on the balance Learning Objectives 1,5 Mariborrowed 5450.000 from Coconut Creek Bank. The 15 years note requires payments due annually, on March 1. Each payment consists of $30.000 principal plus one year interest Dec. Mortgaged the warehouse for $250.000 cash with Saputo Bank. The mortgage requires monthly payments of $8,000. The interest rate on the notes 125 and accrues monthly. The first payment is due on January 1, 2019 31 Recorded interest accrued on the Saputo Bank note 31 Recorded interest accrued on the Coconut Creek Banknote. 2019 Jan. 1 Paid Saputo Bank monthly mortgage payment Feb. 1 Paid Saputo Bank monthly mortgage payment Mar 1 Paid Saputo Bank monthly mortgage payment 1 Paid first installment on note due to Coconut Requirements 1. Journalize the transactions in the Johnson s e m nal Round to the nearest dolar Explanations are not required 2. Prepare the liabilities section of the balance sheet for johnson Pharmacies on March 1, 2019 after all the journal entries are recorded P12-13 Analyzing, journalizing, and reporting bond transactions Learning Objectives 2.3

Answer 1

1	Date	Account titles and explanation				Debit	Credit
	2018
	Mar 1.	Cash				450000
		Notes payable					450000
		(Borrowed cash for notes issued)
	Dec 1.	Cash				250000
		Mortgage payable					250000
		(Borrowed cash by mortgage)
	Dec 31.	Interest expense		(250000*12%*1/12)		2500
		Interest payable					2500
		(Interest accrued on mortgage for 1 month)
	Dec 31.	Interest expense		(450000*5%*10/12)		18750
		Interest payable					18750
		(Interest accrued on notes for 10 month-Mar to Dec)
	2019
	Jan 1.	Mortgage payable			(8000-2500)	5500
		Interest payable				2500
		Cash					8000
		(Monthly mortgage paid)
	Feb 1.	Mortgage payable			(8000-2445)	5555
		Interest expense		(250000-5500)*12%*1/12		2445
		Cash					8000
		(Monthly mortgage paid)
	Mar 1.	Mortgage payable			(8000-2389)	5611
		Interest expense		(250000-5500-5555)*12%*1/12		2389
		Cash					8000
		(Monthly mortgage paid)
	Mar 1.	Interest payable				18750
		Interest expense		(450000*5%*2/12)		3750
		Notes payable				30000
		Cash					52500
		(Paid first instalment on notes)
2	Date	Beginning balance	Principal repayment	Interest expense	Total payment	Ending balance
		a	b=d-c	c=a*12%*1/12	d	e=a-b
	12-01-18					250000
	01-01-19	250000	5500	2500	8000	244500
	02-01-19	244500	5555	2445	8000	238945
	03-01-19	238945	5611	2389	8000	233334
	04-01-19	233334	5667	2333	8000	227668
	05-01-19	227668	5723	2277	8000	221944
	06-01-19	221944	5781	2219	8000	216164
	07-01-19	216164	5838	2162	8000	210326
	08-01-19	210326	5897	2103	8000	204429
	09-01-19	204429	5956	2044	8000	198473
	10-01-19	198473	6015	1985	8000	192458
	11-01-19	192458	6075	1925	8000	186382
	12-01-19	186382	6136	1864	8000	180246
	01-01-20	180246	6198	1802	8000	174049
	02-01-20	174049	6260	1740	8000	167789
	03-01-20	167789	6322	1678	8000	161467
			Liabilities section of the balance sheet
			March 1,2019
	Current liabilities:					$	$
	Current portion of notes payable			(Payable in next year)		30000
	Current portion of mortgage payable				(Refer table)
	(From 04/01/19 to 03/01/20-principal repayment)				(Payable in next year)	71867
	Total current liabilities						101867
	Long-term liabilities:
	Notes payable		(450000-30000-30000)			390000
	Mortgage payable		(233334-71867)			161467
	Total long-term liabilities						551467
	Total liabilities						653334