p13-2
Welsh Required: 1. Prepare the journal entries to record (a) the issuance of the wie by Blanton Plastics and (b) L&T Bank's receivable on October 1, 2018 2. Prepare the journal entries by both firms to record all begint events related to the note through January 31. 2019, 3. Suppose the face amount of the note was adjusted to include interest (a noninterest-bearing note) and 12% is the bank's stated discount multe al Premure the journal entries to record the issuance of the noninterest bearing note by Blanton Plastics on October 1. 2018, the adjusting entry at December 31, and payment of the note at maturity. (b) What would be the effective interest rate? P13-2 Various transactions involving liabilities .LO13-2 through LO13-4 Camden Biotechnology began operations in September 2018. The following selected transactions relate to liabil mies of the company for September 2018 through March 2019. Camden's fiscal year ends on December 31. I financial statements are issued in April 0000 the 2018 On September 3. opened checking accounts at Second Commercial Bank and negotiated a short-term line of credit of up to $15.000.000 at the bank's prime rate (10.5% at the time). The company will pay no commit ment fees. b. On October 1, borrowed S12 million cash from Second Commercial Bank under the line of credit and issued a five-month promissory note. Interest at the prime rate of Tow was payable y maturity Management planned to issue 10-year bonds in February to repay the note. e. Received $2,000 of refundable deposits in December for reusable containers used to transport and store chemical-based products d. For the September December period, sales on account totaled S4.100,000. The state sales tax rate is and the local sales tax rate is 3%. (This is a summary journal entry for the many individual sales transactions for the period.) e. Recorded the adjusting entry for accrued interest. 2019 In February, issued STO million of 10-year bonds at face value and paid the bank loan on the March I due date. Half of the storage containers covered by refundable deposits were returned in March. The remaining contain ers are expected to be returned during the next six months. Required: 1. Prepare the appropriate journal entries for these transactions 2. Prepare the current and long-term liability sections of the December 31, 2018, balance sheet. Trade accounts payable on that date were $252,000. P 13-3 The balance sheet at December 31, 2018, for Nevada Harvester Corporation includes the liabilities listed below
