1. Many businesses borrow money during periods of increased business activity to finance inventory and accounts receivable. Target Corporation is one of Americas largest general merchandise retailers. Each Christmas, Target builds up its inventory to meet the needs of Christmas shoppers. A large portion of Christmas sales are on credit. As a result, Target often collects cash from the sales several months after Christmas. Assume that on November 1, 2015, Target borrowed $8.1 million cash from Metropolitan Bank and signed a promissory note that matures in six months. The interest rate was 9.50 percent payable at maturity. The accounting period ends December 31.

Required:

1,2&3.

Complete the required journal entries to record the note on November 1, 2015, interest on the maturity date, April 30, 2016, assuming that interest has not been recorded since December 31, 2015. (Enter your answers in whole dollars. If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Journal Entry Worksheet

Record the borrowing of $8,100,000.

Record the interest accrued on the note payable as of December 31, 2015.

Record the repayment of the note plus interest on the maturity date.

Date

General Journal

Debit

Credit

November 01, 2015

*Enter debits before credits

2. Riesen Publishers is a publisher of magazines. Its accounting policy for subscriptions follows:

	Revenues
	Sales of our magazine subscriptions are deferred (as unearned revenue) and recognized as revenues proportionately over the subscription period.

Assume that Riesen Publishers (a) collected $570 million in 2015 for magazines that will be delivered later in 2015 and 2016, and (b) delivered $279 million worth of magazines on these subscriptions in 2015.

a) Using the information given, indicate the accounts, amounts, and accounting equation effects of transactions (a) and (b). (Enter any decreases to account balances with a minus sign. Enter your answers in whole dollars.)

Transaction	Assets		=	Liabilities		+	Stockholders Equity
(a)
(b)

3. On January 1, Applied Technologies Corporation (ATC) issued $700,000 in bonds that mature in 10 years. The bonds have a stated interest rate of 12 percent. When the bonds were issued, the market interest rate was 12 percent. The bonds pay interest once per year on December 31.

a) Determine the price at which the bonds were issued and the amount that ATC received at issuance.

Amount Received at Issuance

b) Complete the required journal entries to record the bond issuance and the first interest payment on December 31 assuming no interest has been accrued earlier in the year. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Journal Entry Worksheet

Record the issuance of bonds of $700,000.

Record the interest payment on December 31.

Date

General Journal

Debit

Credit

January 01

*Enter debits before credits