Brief Exercise 10-2

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Sandhill Co. borrows $73,200 on July 1 from the bank by signing a $73,200, 10%, 1-year note payable. (b) Prepare the journal entry to record the accrued interest at December 31, assuming adjusting entries are made only at the end of the year. (Credit account titles are automatically indented when

Do It! Review 10-1a

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You and several classmates are studying for the next accounting examination. They ask you to answer the following questions:

1. If cash is borrowed on a $68,400, 10-month, 10% note on August 1, how much interest expense would be incurred by December 31? $ [Entry field with correct answer] 2. The cash register total including sales taxes is $46,725, and the sales tax rate is 5%. What is the sales taxes payable? $ [Entry field with incorrect answer] 3. If $46,725 is collected in advance on November 1 for 6-month magazine subscriptions, what amount of subscription revenue should be recognized on December 31? $ [Entry field with incorrect answer]

Exercise 10-7

Carla Vista Co. Ltd. publishes a monthly sports magazine, Fishing Preview. Subscriptions to the magazine cost $30 per year. During November 2017, Carla Vista sells 6,680 subscriptions for cash, beginning with the December issue. Carla Vista prepares financial statements quarterly and recognizes subscription revenue at the end of the quarter. The company uses the accounts Unearned Subscription Revenue and Subscription Revenue. The company has a December 31 year-end.