ACCOUNTING HOMEWORK

Chap 10

E10-1
(a)
June 1 Cash 15,000
Notes Payable 15,000
(To record issuance of 8%, 7-month note
to Gem State Bank)
(b)
June 30 Interest Expense 100
Interest Payable 100
(To record interest for 1 month on Gem
State Bank)
(c)
Interest Payable $700
(d)
Jan. 1 Notes Payable 15,000
Interest Payable 700
Cash 15,700
(To record payment of Gem State Bank
interest-bearing note and accrued interest at
maturity)
E10-3
(a)
June 1 Cash 60,000
Notes Payable 60,000
(To record issuance of 8%, 6-month note
to Acme Bank)
(b)
June 30 Interest Expense 400
Interest Payable 400
(To record interest for 1 month on Acme
Bank)
(c)
Dec. 1 Notes Payable 60,000
Interest Payable 2,400
Cash 62,400
(To record payment of Acme Bank
interest-bearing note and accrued interest at
maturity)
(d)
Total financing cost = $2,400
 P10-2A
(a)

GENERAL JOURNAL
Date Account Titles and Explanation Debit Credit
2017
Sept Inventory
1 12,000
.
Notes Payable 12,000
(To record issuance of 6%, 3-month note to
Pippen)
30 Interest Expense 60
Interest Payable 60
(To record interest for the Pippen note)
Oct. 1 Equipment 16,500
Notes Payable 16,500
(To record issuance of 8%, 4-month note to
Prime Bank)
30 Interest Expense 60
Interest Payable 60
(To record interest for the Pippen note)
Interest Expense 110
Interest Payable 110
(To record interest for the Prime Bank note)
Nov. 1 Equipment 34,000
Notes Payable 26,000
Cash 8,000
(To record issuance of 6%, 12-month note)
30 Interest Expense 60
Interest Payable 60
(To record interest for the Pippen note)
Interest Expense 110
Interest Payable 110
(To record interest for the Prime Bank note)
Interest Expense 130
Interest Payable 130
(To record interest for the vehicle note)
Dec. 1 Notes Payable 12,000
Interest Payable 180
Cash 12,180
(To record payment of Pippen interest-bearing
 note and accrued interest at maturity)
30 Interest Expense 110
Interest Payable 110
(To record interest for the Prime Bank note)
Interest Expense 130
Interest Payable 130
(To record interest for the vehicle note)
 (b)

GENERAL LEDGER
Notes Payable
Dec. 1 12,000 Sept. 1 12,000
Oct. 1 16,500
Nov. 1 26,000
Dec. 31 Bal. 42,500

Interest Payable
Dec. 1 180 Sept. 30 60
Oct. 30 60
110
Nov. 30 60
110
130
Dec. 31 110
130
Dec. 31 Bal. 590

Interest Expense
Sept. 30 60
Oct. 30 60
110
Nov. 30 60
110
130
Dec. 31 110
130
Dec. 31 Bal. 770
(c)
EHLER CORPORATION
Balance Sheet (partial)
December 31, 2017
Liabilities
Current liabilities
Notes Payable $42,500
Interest Payable 590
Total curent liabilities $43,090
(d)
Interest expense relating to notes payable: $770
 P10-3A
(a)
Jan. 1 Interest Payable 40,000
Cash 40,000
(To record payment of the bond interest)
(b)
Jan. 1 Bonds Payable 200,000
Loss on Bond Redemption 6,000
Cash 206,000
(To record redemption of bonds at 103)
(c)

GENERAL JOURNAL
Date Account Titles and Explanation Debit Credit
2017 Adjusting Entries
Dec. 31 Interest Expense 24,000
Interest Payable 24,000
(To accrue the interest on the remaining
bonds)
 P10-4A
(a)
Oct. 1 Cash 700,000
Bonds Payable 700,000
(To record sale of bonds at face value)
(b)

GENERAL JOURNAL
Date Account Titles and Explanation Debit Credit
2016 Adjusting Entries
Dec. 31 Interest Expense 8,750
Interest Payable 8,750
(To accrue bond interest)
(c)
EHLER CORPORATION
Balance Sheet
December 31, 2017
Liabilities
Current liabilities
Bond Interest Payable $8,750
Long-term liabilities
Bonds Payable 700,000
Total liabilities $708,750
(d)
Oct. 1 Interest Payable 35,000
Cash 35,000
(To record payment of the bond interest)

(e)

GENERAL JOURNAL
Date Account Titles and Explanation Debit Credit
2017 Adjusting Entries
Dec. 31 Interest Expense 8,750
Interest Payable 8,750
(To accrue bond interest)
(f)
Jan. 1 Interest Payable 8,750
Cash 8,750
(To record payment of the bond interest)
Bonds Payable 700,000
Loss on Bond Redemption 28,000
Cash 728,000
(To record redemption of bonds at 104)
 P10-5A
(a)
Jan. 1 Cash 5,880,000
Discount on Bonds Payable 120,000
Bonds Payable 6,000,000
(To record sale of bonds at face value)
(b)
EHLER CORPORATION
Balance Sheet
December 31, 2017
Long-term liabilities
Bonds Payable $6,000,000
Less: Discount on bonds payable 112,000 $5,888,000

(c)
Jan. 1 Bonds Payable 6,000,000
Loss on Bond Redemption 224,000
Cash 6,120,000
Discount on Bonds Payable 104,000
(To record redemption of bonds at 102)