Acct 3230 Group Exercise #2 Spring 2019 A. On December 31, 2018, Foster Company had $1,200,000 of short-term debt in the form of tes payable due February 2, 2019. On January 21, 2019, the company issued 25,000 shares of its common stock for $38 per share, receiving $950,000 proceeds after other costs of issuance. On February 2, 2019, the proceeds from the stock sale, supplemented by an additional $250,000 cash, are used to liquidate the $ brokerage fees and 1,200,000 debt. The December 31, 2018, balance sheet is issued on February 23, 2019. Required Show how the $1,200,000 of short-term debt should be presented on the December 31, 2017, balance sheet, including note disclosure. B. Presented below is a list of possible transactions 1. Purchased inventory for $80,000 on account (assume perpetual system is used). 2. Issued an $80,000 note payable in payment on account (see item 1 above). 3. Recorded accrued interest on the note from item 2 above at 10%. Assume the note is a one-year note and 3 months have passed. 4. Signed a $100,000 note from the bank by signing a 6-month, zero-interest-bearing note. Prevailing annual interest rate is 10% Recognized 4 months' interest expense on the note from item 4 above. 6. Recorded sales revenue of $75,260 on account, which includes 5% sales tax. 7. Incurred a contingency loss of $45,000 on a lawsuit. The company's lawyer believes there is a reasonable possibility that the company could lose. 8. Accrued warranty expense of 15,000 on sales. 9. Paid warranty costs that were accrued in item 8 above. 10. Purchased goods for $85,000 subject to a cash disc and accounts payable are recorded at net amounts after cash discounts (assume perpetual ount, terms of 2/10, n/30. Purchases system is used). 11. Paid the invoice from 10. above, thirty days later. Required Record the journal entries (if needed) for the above transactions