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Exercise 9-21 Complete the accounting cycle using long-term liability transactions (LO9-2, 9-8) [The following information applies to the questions displayed below.) On January 1,
Exercise 9-21 Complete the accounting cycle using long-term liability transactions (LO9-2, 9-8) [The following information applies to the questions displayed below.) On January 1, 2021, the general ledger of Freedom Fireworks includes the following account balances: Accounts Cash Debit $ 12,200 Credit Accounts Receivable: 36,000 Inventory 153,000 Land 77,300 Buildings 130,000 Allowance for Uncollectible Accounts $ 2,800 Accumulated Depreciation 10,600 Accounts Payable 28,700 Common Stock 210,000 Retained Earnings 156,400 Totals $408,500 $408,500 During January 2021, the following transactions occur: January Borrow $110,000 from Captive Credit Corporation. The installment note bears interest at 6% annually and matures in 5 years. Payments of $2,127 are required at the end of each month for 60 months.. Receive $32,000 from customers on accounts receivable. 1 January 4 January 10 January 15 January 30 January 31 Pay cash on accounts payable, $21,000. Pay cash for salaries, $29,900. Firework sales for the month total $200,600. Sales include $66,000 for cash and $134,600 on account. The cost of the units sold is $117,500. Pay the first monthly installment of $2,127 related to the $110,000 borrowed on January 1. Round your interest calculation to the nearest dollar.
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