Question

Problem 10-2A Bramble Corporation sells rock-climbing products and also operates an indoor climbing facility for dimbing enthusiasts. During the last part of 2017, Bramble had the following transactions related to notes payable $14,400 note to Pippen Sept. 1 Issued a purchase inventory. The 3-month note payable bears interest of 6 % and is due December (Bramble uses a perpetual inventory system.) Sept. 30 Recorded accrued interest for the Pippen note. Issued a $20,400, 8% , 4-month note to Prime Bank to finance the purchase of a new climbing wall for advanced climbers. The note is due February 1 Oct. 1 Recorded accrued Interest for the Pippen note and the Prime Bank note. Oct 31 Issued a $25,200 note and paid $8,500 cash to purchase a vehidle to transport clients to nearby climbing sites s part of a new series of climbing classes. This note bears interest of 8% and matures in 12 months. Nov. 1 Nov. 30 Recorded accrued interest for the Pippen note, the Prime Bank note, and the vehicle note. Paid principal and interest on the Pippen note Dec. 1 Dec. 31 Recorded accrued interest for the Prime Bank note and the vehicle note. Prepare journal entries for the transactlons noted above. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries In the order presented in the problem.) Account Titles and Explanation Date Debit Credit Sept. 1 Inventory 14400 Notes Payable 14400 Sept. 30 Interest Expense 72 Interest Payable Equipment 22400 Oct. 1 Notes Payable 22400 Interest Expense 240 Oct, 31 Interest Payable ло Equipment 33700 Nov. 1 Notes Payable 25200 Cash 8500 Interest Expense Nov. 30 илв 408 Interest Payable Dec. 1 Notes Payable 14400 Interest Payable Cash Interest Expense Dec. 31 Interest Payable Post the above entries to the Notes Payable, Interest Payable, and Interest Expense accounts. (Post entries in the order of journal entries posted in the previous part of the question.) Notes Payable Interest Expense Interest Payable SHOW LIST OF ACCOUNTS Show the balance sheet presentation of notes payable and interest payable at December 31 BRAMBLE CORPORATION Balance Sheet (Partial) SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT How much interest expense relating to notes payable did Bramble incur during the year? Interest expense incurred during the yeart Click if you would like to Show Work for this question: Open Show Work

Answer 1

General Journal Debit Credit Date |Inventory Notes Payable 01-Sep-17 14,400 14,400 Interest expense (14400*6%/12) Interest payable 30-Sep-17 72 72 Equipment Notes Payable 20,400 01-Oct-17 20,400 Interest expense [(14400*6%/12)+(20400*8%/12)]| $ Interest payable 31-Oct-17 208 208 Equipment Notes Payable 33,700 01-Nov-17 25,200 Cash 8,500 Interest expense [(208)+(25200*8%/12)] 30-Nov-17 376 Interest payable 376 Notes Payable 01-Dec-17 14,400 Interest payable (72*3) Cash 216 14,616 Interest expense (376-72) Interest payable S 31-Dec-17 304 304

Dr Interest expense Cr Particulars 30-Sep-17 Interest Payable 31-Oct-17 Interest Payable 30-Nov-17 Interest Payable 31-Dec-17 Interest Payable Particulars in $ in $ Date Date 72 208 376 31-Dec-17 Balance c/d 304 960 960 960 31-Dec-17 Balance b/d 960 31-Dec-17 Income Summary 960 Interest Payable in $ Dr Cr Particulars Particulars 21630-Sep-17 |Interest expense 31-Oct-17 Interest expense 30-Nov-17 Interest expense in $ Date Date 01-Dec-17 Cash 72 208 376 31-Dec-17 Balance c/d 31-Dec-17 Interest expense 744 304 960 960 Notes Payable Dr Cr in $ in $ Particulars Particulars Date Date 01-Dec-17 Cash 14400 01-Sep-17 Inventory 14,400 01-Oct-17 Equipment 01-Nov-17 Equipment 20,400 25,200 31-Dec-17 Balance c/d 45,600 60,000 60,000 Bramble Corporation Balance Sheet (Partial) as on December 31, 2017 Current Liabilities Interest Payable 744 Note Payable $45,600 Interest expense incurred during the year 960