You will record the following transactions into the retailers accounting records. The year end of the retailer is June 30. It uses a perpetual inventory system and has an allowance for doubtful notes general ledger account.

1. The retailer purchased equipment on December 1 for $76,500, paying $5,600 cash with the balance owing on account. The equipment is expected to have a useful life of 6 years, a residual value of $2,600, and will be depreciated using the double-diminishing balance method. Dont forget to prepare the year end adjusting entry.

2. On January 1, the retailer signed a $70,900 note payable to obtain more time to pay the account owing (see transaction #1). It is a 5-year, 9% blended installment note requiring a semi-annual payment of $8,960 on June 30 and December 31 of each year.

3. The retailer received its annual $9,360 property tax bill on March 31.

4. On March 1, the retailer sold $6,300 of merchandise to a customer. The cost of the inventory sold was $3,780. The customer signed a 3-month, 7% promissory note to pay the amount owed with accrued interest.

5. Three months later, customer did not pay the promissory note (see transaction #4) on June 1. The customer is expected to pay at a later date.

6. The retailer paid employee salaries totaling $13,200 on June 28. Of this amount, $653 is for CPP, $277 for EI, $3,168 for employee income taxes. The employer is liable for $653 for CPP and $388 for EI.

7. The retailer paid its property tax bill (see transaction #3) on June 30.

Instructions: Write you answers by hand, scan your working papers and upload to the link on the main page of the Moodle website as a PDF file. Printing the problem information is permitted but only for personal use during the exam. Show all your calculations.

a) Prepare the journal entries and the year-end adjusting entry related to the above transactions. Calculate to the nearest dollar.

b) Present the note payable on the June 30, 2021, classified format balance sheet.