Question

-CH 131 Help Save & Exi 3 Problem 13-4 Various liabilities [LO13-1, 13-2, 13-3, 13-4] The unadjusted trial balance of the Manufacturing Equitable at December 31, 2018, the end of lits fiscal year, Included the following account balances, Manufacturing's 2018 financlal statements were Issued on April 1, 2019 receivable Rocounts payable Bank sotes payable Mortgage note peysble 8,800 1,290,000 Other Information &The bank notes, issued August 1, 2018, are due on July 31, 2019, and pay interest at a rate of 9%, payable at maturity. b. The mortgage note is due on March 1, 2019, Interest at 8% has been paid up to December 31 (assume 8% s a reaistic rate Rwvees Manufacturing intended at December 31, 2018, to refinance the note on its due date with a new 10-year mortgage note. In fact, on in cash on the principal belance and refinanced the remalining $1,015,000 c Included i n the accounts receivable balance at December 31, 2018, were two subsidiary accounts that had been overpald and had credit balances totaling $16,500. The Menufacturing and apply the overpayments to those future purchases. accounts were of two major customers who were expected to order more merchandise from d. On November 1,2018, Manufacturing rented a portion of its factory to a tenant for $38.,400 per year payable in advance. The months ended October 31, 2019, was received as required and was credited to rent revenue L Prepare any necessary 2. Prepare the current and long-term adjusting journal entries at December 31, 2018, pertaining to each item of other information (a-d Sability sections of the December 31 2018, balance sheet MacBook Air 2
Solve require 1 and 2

Answer 1

1)
a)Interest expense(db) 638000*9%*(5/12)=23925
interest payable(cR)23925
b)Since the interest has been paid till dec 31st there is no need of any adjusting entry required
c)Accounts receivable(db)16500
advance from customers(cr)16500
d)Rent revenue(db)=32000
unearned revenue(cr)32000

2)
Current laibilites:
Accounts payable=38000
Notes payable=638000
current portion of long term debt=275000
Interest payable=23925
Advance from customers=16500
Unearned revenue=32000
Long term liabiltes:
Mortage note payable=1015000