(Accounts and Notes Payable) The following are selected 2014 transactions of Walker Corporation.

Sep 1

Purchased inventory from Encino Company on account for

$50,000

Astin records purchases gross and uses a periodic inventory system

Oct 1

Issued a

$50,000

12-month,

8%

note to Encino in payment of account.

Oct 1

Borrowed

$50,000

from the Shore Bank by signing a 12-month, zero-interest-

bearing

$54,000

note.

Instructions:

(a) Prepare journal entries for the selected transactions above.

Sep 1

Account Title

Amount

Account Title

Amount

Oct 1

Account Title

Amount

Account Title

Amount

Oct 1

Account Title

Amount

Account Title

Formula

Account Title

Amount

(b) Prepare adjusting entries at December 31.

Dec 31

Account Title

Formula

Account Title

Formula

Dec 31

Account Title

Formula

Account Title

Formula

(c) (1) Compute the total net liability to be reported on the December 31 balance sheet for the interest- bearing note.

Account Title

Amount

Account Title

Amount

Formula

(c) (2) Compute the total net liability to be reported on the December 31 balance sheet for the zero-interest- bearing note.

Account Title

Amount

Account Title

Amount

Formula