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 $11,600 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 entriess annually at its year end, December 31. During the next four months, Cling-on incurred the following Purchased inventory on account for $16,400 from Black Diamond, terms n/30. The company uses a perpetual inventory system. Sept. 1 Repaid the $11,600 bank loan payable to City Credit Union (see opening balance), as well as any interest owed. 30 Issued a six-month, 4%, $16,400 note payable to Black Diamond in exchange for the account payable (see September 1 transaction). Interest is payable on the first of each month. Oct. 1 2 Borrowed $23,000 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 Nov. 1 Paid interest on the Black Diamond note and Montpelier Bank loan Dec. 1 Purchased a vehicle for $27,200 from Auto Dealer Ltd. to transport clients to nearby climbing sites. Paid $8,800 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 Record the above transactions. (Post entries in the order presented in the problem statement. Credit account tit Account Titles and Explanation Date Debit Credit Sept. 1 Inventory 16400 Accounts Payable 16400 Sept. 30 Bank Loan Payable 11600 Interest Expense 87 Cash 11687 16400 Accounts Payable Oct. 1 Notes Payable 16400 Buildings 23000 Oct. 2 Bank Loan Payable 23000 Interest Expense Nov. 1 55 Cash 55 (To record interest on Black Diamond note.) Interest Expense Nov. 1 58 Cash 58 (To record interest on Montpelier Bank loan.) Interest Expense Dec. 1 55 Cash 55 (To record interest on Black Diamond note.) Interest Expense Dec. 1 58 Cash 58 (To record interest on Montpelier Bank loan.) Vehicles Dec. 3 27200 Cash 8800 Bank Loan Payable 18400 Interest Expense 104 Dec. 31 ! Interest Payable 104 Open T accounts for the Interest Expense, Interest Payable, Bank Loan Payable, and Notes Payable accounts and enter all opening balances. Post the above entries. in the previous part.) Interest Expense Sept. 30 Nov. 1 55 Nov. 1 58 Dec. 1 55 Dec. 1 58 Dec. 31 Interest Payable x Notes Payable Bank Loan Payable SHOW LIST OF ACCOUNTS X Your answer is incorrect. Try again Assuming there is no other interest expense than that recorded in the transactions above, show the income statement presentation of interest expense for the year ended December 31. ( CLING-ON LTD. Income Statement (partial) Year Ended December 31, 2018 Other revenues and expenses SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT x Your answer is incorrect. Try again Show the current liability section of the statement of financial position as at December 31, listing balances of accounts affected by the above transactions. (Round answers to the neare CLING-ON LTD. Statement of Financial Position (partial) December 31, 2018 Current liabilities SHOW LIST OF ACCOUNTS LTNK TO TEXT LTNK TO TEXT 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 $11,600 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 entriess annually at its year end, December 31. During the next four months, Cling-on incurred the following Purchased inventory on account for $16,400 from Black Diamond, terms n/30. The company uses a perpetual inventory system. Sept. 1 Repaid the $11,600 bank loan payable to City Credit Union (see opening balance), as well as any interest owed. 30 Issued a six-month, 4%, $16,400 note payable to Black Diamond in exchange for the account payable (see September 1 transaction). Interest is payable on the first of each month. Oct. 1 2 Borrowed $23,000 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 Nov. 1 Paid interest on the Black Diamond note and Montpelier Bank loan Dec. 1 Purchased a vehicle for $27,200 from Auto Dealer Ltd. to transport clients to nearby climbing sites. Paid $8,800 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 Record the above transactions. (Post entries in the order presented in the problem statement. Credit account tit Account Titles and Explanation Date Debit Credit Sept. 1 Inventory 16400 Accounts Payable 16400 Sept. 30 Bank Loan Payable 11600 Interest Expense 87 Cash 11687 16400 Accounts Payable Oct. 1 Notes Payable 16400 Buildings 23000 Oct. 2 Bank Loan Payable 23000 Interest Expense Nov. 1 55 Cash 55 (To record interest on Black Diamond note.) Interest Expense Nov. 1 58 Cash 58 (To record interest on Montpelier Bank loan.) Interest Expense Dec. 1 55 Cash 55 (To record interest on Black Diamond note.) Interest Expense Dec. 1 58 Cash 58 (To record interest on Montpelier Bank loan.) Vehicles Dec. 3 27200 Cash 8800 Bank Loan Payable 18400 Interest Expense 104 Dec. 31 ! Interest Payable 104 Open T accounts for the Interest Expense, Interest Payable, Bank Loan Payable, and Notes Payable accounts and enter all opening balances. Post the above entries. in the previous part.) Interest Expense Sept. 30 Nov. 1 55 Nov. 1 58 Dec. 1 55 Dec. 1 58 Dec. 31 Interest Payable x Notes Payable Bank Loan Payable SHOW LIST OF ACCOUNTS X Your answer is incorrect. Try again Assuming there is no other interest expense than that recorded in the transactions above, show the income statement presentation of interest expense for the year ended December 31. ( CLING-ON LTD. Income Statement (partial) Year Ended December 31, 2018 Other revenues and expenses SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT x Your answer is incorrect. Try again Show the current liability section of the statement of financial position as at December 31, listing balances of accounts affected by the above transactions. (Round answers to the neare CLING-ON LTD. Statement of Financial Position (partial) December 31, 2018 Current liabilities SHOW LIST OF ACCOUNTS LTNK TO TEXT LTNK TO TEXT