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Help asap please Problem 10-2A Cling-on Ltd. sells rock-climbing products and also operates an indoor climbing facility for climbing enthusiasts. On July 1, 2018, Cling-on
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Problem 10-2A Cling-on Ltd. sells rock-climbing products and also operates an indoor climbing facility for climbing enthusiasts. On July 1, 2018, Cling-on received a three-month $10,800 bank loan from City Credit Union due on September 30, 2018, and bearing interest at 3%. Interest is payable at maturity. Note that the company records adjusting entries annually at its year end, December 31. During the next four months, Cling-on incurred the following: Sept. 1 30 Oct. 1 2 Nov. 1 Dec. 1 3 Purchased inventory on account for $13,500 from Black Diamond, terms n/30. The company uses a perpetual inventory system. Repaid the $10,800 bank loan payable to City Credit Union (see opening balance), as well as any interest owed. Issued a six-month, 4%, $13,500 note payable to Black Diamond in exchange for the account payable (see September 1 transaction). Interest is payable on the first of each month. Borrowed $26,400 from Montpelier Bank for 12 months at 3% to finance the building of a new climbing area for advanced climbers. (Use the asset account Buildings.) Interest is payable monthly on the first of each month. Paid interest on the Black Diamond note and Montpelier Bank loan. Paid interest on the Black Diamond note and Montpelier Bank loan. Purchased a vehicle for $27,500 from Auto Dealer Ltd. to transport clients to nearby climbing sites. Paid $7,500 as a down payment and borrowed the remainder from Atlantic Bank for 12 months at 3%. Interest is payable quarterly, at the end of each quarter. Recorded accrued interest for the Black Diamond note and the Montpelier and Atlantic loans. 31 Date Account Titles and Explanation Debit Credit Sept. 1 inventory Accounts Payable ,500 Sept. 30 Interest Expense Bank Loan Payable 10,800) Cash Oct. 1 | Accounts Payable 3,500 Notes Payable 26,400 Oct. 2 | Buildings Bank Loan Payable 26,400 Nov. 1 | Interest Expense Cash (10 FECUIU MILEI ESL OIL DIALK DIDINIU TOLE.) T Nov. 1 Interest Expense Cash (To record interest on Montpelier Bank loan.) Dec. 1 Dec. 1 1 Interest Expense interest Expense Cash (To record interest on Black Diamond note.) Dec. 1 Interest Expense cash 225 (To record interest on Montpelier Bank loan.) Dec. 3 vehicles 27.500 Bank Loan Payable 20000 1 cash 7,500 Dec. 31 1 Interest Expense Interest Payable 200Step by Step Solution
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