Question
The following are selected transactions of Astin Corporation during year 2020. On September 1 st , Astin Corp. purchased inventory from Encino Company on account
The following are selected transactions of Astin Corporation during year 2020.
On September 1st, Astin Corp. purchased inventory from Encino Company on account for $50,000. Prepare the journal entry for Astin Corp. to record this credit purchase, assuming Astin Corp. uses the gross method and the periodic inventory system (1.5 points).
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On October 1st, Astin Corp. issued a $50,000, 12-month, 8% note to Encino Company as the payment for the credit purchase made on September 1st. Prepare the journal entry for Astin Corp. to record the issue of this note (1.5 points).
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Prepare Astin Corp.s adjusting entry for this note on December 31st, 2020 (fiscal year end) (1.5 points).
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Compute the total liability regarding this note that need to be reported on Astin Corp.s balance sheet on December 31st, 2020 (fiscal year end) (0.5 point).
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