1) On November 1, 2018, Aviation Training Corp. borrows $43,000 cash from Community Savings and Loan. Aviation Training signs a three-month, 6% note payable. Interest is payable at maturity. Aviation's year-end is December 31.

Required:

a) Record in the journal the issuance of note

b) Record in the journal the adjustment for interest

c) Record in the journal the repayment of the note at maturity

2) On August 1, 2018, Trico Technologies, an aeronautic electronics company, borrows $20.8 million cash to expand operations. The loan is made by FirstBanc Corp. under a short-term line of credit arrangement. Trico signs a six-month, 6% promissory note. Interest is payable at maturity. FirstBanc Corp.'s year-end is December 31.

Required:

1., 2.& 3. Record the necessary entries in the Journal Entry Worksheet below for FirstBanc Corp. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in dollars, not in millions (i.e. 5 should be entered as 5,000,000).)

a) Record in the journal the acceptance of note

b) Record in the journal the adjustment for interest

c) Record in the journal the receipt of cash at maturity

3) OS Environmental provides cost-effective solutions for managing regulatory requirements and environmental needs specific to the airline industry. Assume that on July 1 the company issues a one-year note for the amount of $4.9 million. Interest is payable at maturity.

Required:

Determine the amount of interest expense that should be recorded in a year-end adjusting entry under each of the following independent assumptions:

Interest Rate Fiscal Year-End Interest expense

1) 10% December 31

2) 11% September 30

3) 12% October 31

4) 6% January 31

) During January, Luxury Cruise Lines incurs employee salaries of $1.0 million. Withholdings in January are $76,500 for the employee portion of FICA, $150,000 for federal income tax, $62,500 for state income tax, and $10,000 for the employee portion of health insurance (payable to Blue Cross/Blue Shield). The company incurs an additional $62,000 for federal and state unemployment tax and $30,000 for the employer portion of health insurance.

Required:

1., 2.& 3. Record the necessary entries in the Journal Entry Worksheet below

a) Record in the journal the employee salary expense, withholdings, and salaries payable

b) Record in the journal employer provided fringe benefits

c) Record in the journal salaries payable

5) Apple Inc. is the number one online music retailer through its iTunes music store. Apple sells iTunes gift cards in $15, $25, and $50 increments. Assume Apple sells $19.4 million in iTunes gift cards in November, and customers redeem $12.4 million of the gift cards in December.

Required:

1. & 2. Record the necessary entries in the Journal Entry Worksheet below.

a) Record in the journal the receipt of cash for gifts cards

b) Record in the journal the revenue earned from redemption of gifts cards

c) 3. What is the ending balance in the Deferred revenue account? (Enter your answer in dollars, not in millions. (i.e. 5.5 should be entered as 5,500,000).)

7) Pacific Cruise Lines is a defendant in litigation involving a swimming accident on one of its three cruise ships.

Required:

1. The likelihood of a payment occurring is probable, and the estimated amount is $1.27 million.

2. The likelihood of a payment occurring is probable, and the amount is estimated to be in the range of $1.07 to $1.27 million.

3. The likelihood of a payment occurring is reasonably possible, and the estimated amount is $1.27 million.

4. The likelihood of a payment occurring is remote, while the estimated potential amount is $1.27 million.

Record the necessary entry for the scenarios given above.

Record the contigent liability if needed