2. 3. 4. 5. 6. 7. 8. 9. 1. Billy Bob's Bikes Transactions March 1: Billy Bob purchased a building for $573,696 using $33,696 cash and then borrowing the rest from the bank. The loan from the bank will be paid off over the next 15 years (1/15 of the principal will be paid off at the end of each year). The loan carries an interest rate of 7.72% Interest accrued will be paid off at the end of every year. The building has an expected life of 24 years and will be depreciated using the straight-line method. March 1: Billy Bob paid in advance for a 10-month insurance policy, which will begin today. He paid $6,660 cash for the policy. March 2: Billy Bob purchased 14 bikes from Paul's Choppers. Each bike cost $6,300 and the credit terms are 3/10, n/30. (Note: Bikes are considered Inventory) March 2: Paul's Choppers paid FedEx $5,083 cash to ship the bikes to Billy Bob. March 3: Billy Bob hires Biker Betty for promotional purposes. He estimates her salary to be $12/hour. She will probably work 10 hours this month. March 5: Billy Bob sold 8 bikes to Bikes R' Us for $7,850 each with credit terms of 2/10, n/30. The total cost of the bikes was figured out to be $50,400. March 6: Billy Bob paid UPS $4,516 cash to ship the bikes to Bikes R' Us. March 8: Stockholder's invest $175,075 into the company in exchange for Billy Bob's Bikes common stock. March 10: Billy Bob paid off the balance due from Paul's Choppers. 10. March 12: Billy Bob purchased 16 more bikes from Paul's Choppers. Each bike cost $6,225 and the credit terms are 1/20, n/60. 11. March 12: Billy Bob paid UPS $7,177 cash to ship the bikes he bought from Paul's Choppers. 12. March 14: Bikes R' Us paid their balance off for the bikes they purchased. 13. March 15: Billy Bob bought a Bike Making Machine for $407,100 using $47,100 cash and then borrowing the rest from the bank. The loan will be paid off over the next 3 years (1/3 of the principal will be paid at the end of each year). The loan carries an interest rate of 8.68 percent. Interest accrued will be paid off at the end of every year. The Bike Making Machine has an expected life of 11.5 years and will be depreciated using the straight-line method. 4. March 16: Billy Bob sold 9 bikes to Biker's Bargains for $7,900 each with credit terms of 2/10 EOM, n/45. The cost of the bikes was determined to be $59,509. March 16: Biker's Bargains paid FedEx $4,283 to have the bikes shipped to them. March 18: Billy Bob purchased $3,099 worth of supplies from Olga's Office Supplies paying cash.