Question
The following are selected 2015 transactions of Rudy Company. July 7 Purchased inventory from Casino Company on account for $65,000. Rudy records purchases gross and
The following are selected 2015 transactions of Rudy Company.
July 7 Purchased inventory from Casino Company on account for $65,000. Rudy records purchases gross and uses a periodic inventory system.
Sept 1 Issued a $65,000, 6-month, 9% note to Casino in payment of account.
Sept 1 Borrowed $65,000 from the Cliff Bank by signing a 6-month, zero-interest -bearing $67,925 note.
Instructions: (a) Prepare journal entries for the three transactions above.
(b) Prepare adjusting entries at December 31, 2015.
(c) Compute the total net liability to be reported on the December 31, 2015 balance sheet for :
(1) The interest-bearing note.
(2) The zero-interest-bearing note
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Accounting Principles
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
10th Edition
1119491630, 978-1119491637, 978-0470534793
