v

1. The statement of financial position on December 31, 2011, and 2012 for Majan Manufacturing Company includes the liabilities listed below:

2011

1. On September 15^th, 2011, Majan company purchased Inventory from a supplier on credit for $250,000.

2. On October 1^st, 2011, Majan borrowed 12 million cash and issued nine months, 12% promissory note. Interest was payable at maturity.

3. On November 1, 2011, Majan rented a portion of its factory to a tenant for $15,000 per year, payable in advance. The payment for the 12 months ended October 31, 2012, was received as required and was credited to rent revenue.

4. During December, received $6,500 of refundable deposits relating to containers used to transport equipment parts.

5. During December, credit sales totaled $30,000. The state sales tax rate is 7%. (This is a summary journal entry for many individual sales transactions for the period.)

6. On December 31^st, 2011, Majan received part of the storage containers covered by refundable deposits which worth $3,200. The remaining are expected to be received after two years.

7. Recorded the adjusting entry for accrued interest at the end of December 2011.

2012

8. Mortgage note of $1,200,000 is due on March 1^st, 2012. Interest at 9% has been paid up to December 31^st. Majan intended on December 31, 2011, to refinance the note on its due date with new 8 years mortgage note to the same noteholders. On March 1^st, Majan paid $300,000 in cash on the principle balance and refinanced the remaining.

Required: [ 11 Marks]

1. Prepare the appropriate journal entries for the transactions above related to 2011. (8 marks)

Prepare the current and long-term liability sections of December 31, 2011, statement of financial position. (3 marks)

1. The statement of financial position on December 31, 2011, and 2012 for Majan Manufacturing Company includes the liabilities listed below:

2011

1. On September 15^th, 2011, Majan company purchased Inventory from a supplier on credit for $250,000.

2. On October 1^st, 2011, Majan borrowed 12 million cash and issued nine months, 12% promissory note. Interest was payable at maturity.

3. On November 1, 2011, Majan rented a portion of its factory to a tenant for $15,000 per year, payable in advance. The payment for the 12 months ended October 31, 2012, was received as required and was credited to rent revenue.

4. During December, received $6,500 of refundable deposits relating to containers used to transport equipment parts.

5. During December, credit sales totaled $30,000. The state sales tax rate is 7%. (This is a summary journal entry for many individual sales transactions for the period.)

6. On December 31^st, 2011, Majan received part of the storage containers covered by refundable deposits which worth $3,200. The remaining are expected to be received after two years.

7. Recorded the adjusting entry for accrued interest at the end of December 2011.

2012

8. Mortgage note of $1,200,000 is due on March 1^st, 2012. Interest at 9% has been paid up to December 31^st. Majan intended on December 31, 2011, to refinance the note on its due date with new 8 years mortgage note to the same noteholders. On March 1^st, Majan paid $300,000 in cash on the principle balance and refinanced the remaining.

Required: [ 11 Marks]

1. Prepare the appropriate journal entries for the transactions above related to 2011. (8 marks)

Prepare the current and long-term liability sections of December 31, 2011, statement of financial position. (3 marks