Accounting for long-term note payable transactions [15-20 min]
Consider the following note payable transactions of Tube Video Productions.
2014 | ||
Mar 1 | Purchased equipment costing $80,000 by issuing an eight-year, 12% note payable. The note requires annual principal payments of $10,000 plus interest each March 1. | |
Mar 1 | Recorded current portion of the note in the journal. | |
Dec 31 | Accrued interest on the note payable. | |
2015 | ||
Mar 1 | Paid the first installment on the note. | |
Dec 31 | Accrued interest on the note payable. | |
Requirements
1. Journalize the transactions for the company.
2. Considering the given transactions only, what are Tube Video Productions’ total liabilities on December 31, 2015?
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