Question

es a 4% sales tax that must be a. During December, cash sales totaled $850,000 which includes a 4% sales remitted by the 15th day of the following month. b. On April 1, the company bought a truck for $40,000, paying $5,000 in cash ane 1 year 5% note for the balance. coin cash and signing, a Create all appropriate journal entries. Prepare any adjusting entries required on December 31. Gilbert Company issues $410,000. 9% bonds due in 11 years with interest payable annually. At the time of issue, the market rate for the bonds is 10%. Compute the issue price of the bonds. Assume the following- present value= 56344 Table 6-2 n=11 i=9% Table 6-2 n=11 i=10% Table 6-4 n=11 i=9% present value= .34185 present value= 7.18100 future value= .46565 future value= .36578 Table 6-4 n=11 i=10% present value= 7.16300 future value= 6.5432 future value= 6.3232

Answer 1

Solution 4:

Journal Entries
Event	Particulars	Debit	Credit
a	Cash Dr	$850,000.00
	To Sales revenue		$817,308.00
	To Sales tax payable		$32,692.00
	(To record sales)
b	Truck Dr	$40,000.00
	To Cash		$5,000.00
	To Notes Payable		$35,000.00
	(To record purchase of truck)

Adjusting Journal Entries
Date	Particulars	Debit	Credit
31-Dec	Interest expense Dr ($35,000*5%*9/12)	$1,313.00
	To Interest payable		$1,313.00
	(To record interest accrued)

Solution 5:

Computation of bond price
Table values are based on:
n=	11
i=	10.00%
Cash flow	Table Value	Amount	Present Value
Par (Maturity) Value	0.34185	$410,000.00	$140,159
Interest (Annuity)	7.16300	$36,900.00	$264,315
Price of bonds			$404,473