Exercise 13-2

The following are selected 2017 transactions of Sean Astin Corporation.

Sept. 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.

Prepare journal entries for the selected transactions above. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record entries in the order displayed in the problem statement.)

Date	Account Titles and Explanation	Debit	Credit
September 1October 1
September 1October 1
October 1

Prepare adjusting entries at December 31. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,125.)

Date	Account Titles and Explanation	Debit	Credit
December 31
	(To record interest on the note)
December 31
	(To record discount on the note)

Compute the total net liability to be reported on the December 31 balance sheet for:

(1)		The interest-bearing note		$
(2)		The zero-interest-bearing note		$