Apple Mountain Company Trial Balance 11/30/17 Dr Cr Cash Accounts Receivable Allowance for Doubtful Accounts Short Term Note Receivable 162,000 124,000 1,000 50,000 Supplies 55,000 Inventory 62,000 Equipment 75,000 Building 0 Accumulated Depreciation 32,000 Copyright 94,000 Accounts Payable 12,000 Dividends Payable 0 Interest Payable Unearned Revenue ST Note Payable LT Mortgage Payable Bonds Payable Premium on Bonds Payable Common Stock - $1.50 par 0 14,000 15,000 0 200,000 26,840 105,000 Paid In Capital In Excess of Par - CS Preferred Stock-$5 par 86,000 1,000 Paid In Capital In Excess of Par - PS 50,000 Treasury Stock Retained Earnings Dividends Sales Revenue Sales Returns & Allowances Sales Discounts Cost of Goods Sold 0 3,500 2,000 490,160 7,000 3,000 46,008 Bad Debts Expense Depreciation Expense Wages Expense Rent Expense Insurance Expense Supplies Expense 5,000 16,000 160,000 98,000 25,000 16,000 Interest Revenue 1,000 Interest Expense 6,500 Gain on Sale of Equipment 15,000 Income Tax Expense 46,000 Total 1,052,500 1,052,500 1. The company purchased a building December 1, 2017 with a LT Mortgage Payable of $300,000 at 8% interest. (Record the purchase of the building.) 2. The company issued 1,000 shares of Common Stock for $6,000 on December 25, 2017. 3. On December 29, 2017 the company declared a cash dividend of $3.00 per share for common stock on the shares issued and declared (including the additional 1,000 shares issued on December 25th.) 4. The terms of the LT mortgage payable from #1 above require the company to make monthly installment payments over the term of the loan. Each payment consists of interest on the unpaid balance of the loan and a reduction of loan principal. Record the first monthly payment of $3,800 on the LT Mortgage Payable on December 31, 2017. 5. The company last paid interest on the ST note payable on November 1, 2017. interest expense for the last 2 months of 2017. The annual interest rate is 8%. whole dollar. Record the accrued Round to nearest 6. The Bonds Payable and related Premium amounts on the Nov. trial balance relate to the Jan. 1, 2017 Issuance of the following bonds: On Jan. 1, 2017, the company issued 10%, 10-year bonds when the market rate for similar investments was 8%. The company pays interest each year on January 1st. On Dec. 31, 2017, use the effective interest method of amortizing the premium on bonds payable to accrue the interest expense for 2017. Round your interest expense calculation to the nearest whole dollar. 7. The Unearned Revenue amount on the Nov. trial balance relates to amounts that the company previously collected in cash for sales that were to be completed in the future. The company completed some of these sales during December and now owes only $10,000 of that unearned revenue. Record the necessary adjustment for December 31, 2017. 8. On December 31, 2017, the company purchased 50 shares of its own Preferred Stock for Treasury Stock for $11 per share. GENERAL JOURNAL DATE ACCOUNT NAME DEBIT CREDIT Use the space below for T-accounts (REQUIRED). (Specific instructions: Prepare T-accounts for each account affected by a journal entry. Write in the unadjusted balance for each of these accounts (from page 1)...the unadjusted balance might be a debit, a credit, or zero balance. Now you are ready to post your journal entries from page 3 onto the corresponding T-accounts and then calculate adjusted balances.) 3 IF + ADJUSTED TRIAL BALANCE 12/31/17 Dr Cr Supplemental Questions 1. What will be the balance in the Mortgage Payable Account at Jan. 31, 2018 after the second monthly payment is made? 2. The Company is about to issue $2,000,000 of 5-year, 12% bonds. Interest will be paid semi- annually. The market interest rate for such securities is 10%. How much can The Company expect to receive from the sale (issuance) of these bonds? I=