Please answer the exercise in full, there are 3 parts. Problem 10-2A Ehler Corpo
ID: 2525502 • Letter: P
Question
Please answer the exercise in full, there are 3 parts.
Problem 10-2A
Ehler Corporation sells rock-climbing products and also operates an indoor climbing facility for climbing enthusiasts. During the last part of 2017, Ehler had the following transactions related to notes payable.
Recorded accrued interest for the Prime Bank note and the vehicle note.
Post the above entries to the Notes Payable, Interest Payable, and Interest Expense accounts. (Post entries in the order of journal entries posted in the previous part of the question.)
Show the balance sheet presentation of notes payable and interest payable at December 31.
Account titles to use for this exercise and only these titles will be accepted as the correct answer:
Accounts Payable
Accounts Receivable
Accumulated Depreciation-Equipment
Accrued Pension Liability
Bonds Payable
Buildings
Cash
Common Stock
Cost of Goods Sold
Current Portion of Long-Term Debt
Depreciation Expense
Discount on Bonds Payable
Dividends
Equipment
Federal Income Taxes Payable
Federal Unemployment Taxes Payable
FICA Taxes Payable
Gain on Bond Redemption
Income Tax Expense
Income Taxes Payable
Insurance Expense
Interest Expense
Interest Payable
Inventory
Land
Loss on Bond Redemption
Mortgage Payable
No Entry
Notes Payable
Other Operating Expenses
Payroll Tax Expense
Premium on Bonds Payable
Prepaid Insurance
Property Taxes Payable
Retained Earnings
Salaries and Wages Expense
Salaries and Wages Payable
Sales Revenue
Sales Taxes Payable
Service Revenue
Share Premium-Conversion Equity
State Income Taxes Payable
State Unemployment Taxes Payable
Subscription Revenue
Ticket Revenue
Unearned Rent Revenue
Unearned Sales Revenue
Unearned Service Revenue
Unearned Subscription Revenue
Unearned Ticket Revenue
Union Dues Payable
Warranty Liability
Recorded accrued interest for the Prime Bank note and the vehicle note.
CSecure htt edugen.wicyplus.com/edugeryltymainun Return ta Rlxkboard l, Accounting, Ge Chapter 10-Class Mea ting 1 online Ehler corporation sclis rock-dimbing products rd also operatss ?n indoor cimbing facility for dimbng cnthusiasts. During the last port of 2017, Ehler had the following transactions related to notes pootle. scpt. 1 Issucd ? S12,000 notc to Pippen to purchaso inventory. The 3-mcntn notC payabla bcars interact of G? and 's duc Dcccmber ?. Ehlar uses ? perpetual inventory system. Sat. RAcaad acena intarast tor tha Pippen nata Do I Raviw 10-h Ost. 31 Recorded accrued interest for the Fippen note and the Prime Bank note. Nov. ? Issued ? S25,00? nota and paid $8,000 cash to purchase a vehicla to transport dlents to naarby climbing sitas as part of Now 3 Recared acenuad intarest for the Pippen nate, the Prime Bank nnt, and the vhicle nota De1 Faid principal sn interest on the Pippen note Dec. 31 Recorded accrued interest for the Frime E?nk note ?nd te vehicle note. raw saries cr climbing classes. This nota ocars Interest at 0% and matures In ?2 mcnts. Review Score Reviw Results hy Sthady prepare rourma entries for t ve transactions no e above credit account t ?es dre dutomatical y rm ented when dmourt is entered Do not rndent mdnua y Record lournal entries in the order presented in t ve problem. Date Aet Titles and Fxplanation Dec. 1 O lype hene to searchExplanation / Answer
Answers
Working
NOTES PAYABLE to
Pippen
Prime Bank
Purchase of Vehicle
TOTAL
A
Issued date
01-Sep-17
01-Oct-17
01-Nov-17
B
Amount
$ 12,000.00
$ 16,500.00
$ 26,000.00
$ 54,500.00
C
Term [months]
3
4
12
D=A+C
Maturity Date
01-Dec-17
01-Feb-18
01-Nov-18
E
Interest rate
6%
8%
6%
F=B x E
Annual Interest
$ 720.00
$ 1,320.00
$ 1,560.00
G = F/12
Monthly Interest
$ 60.00
$ 110.00
$ 130.00
Interest expenses:
Sep-17
$ 60.00
$ -
$ -
$ 60.00
Oct-17
$ 60.00
$ 110.00
$ -
$ 170.00
Nov-17
$ 60.00
$ 110.00
$ 130.00
$ 300.00
Dec-17
$ 110.00
$ 130.00
$ 240.00
2017 Interest expense
$ 180.00
$ 330.00
$ 260.00
$ 770.00
Date
Accounts titles
Debit
Credit
01-Sep-17
Inventory
$ 12,000.00
Notes payable
$ 12,000.00
(notes payable issued to Pippen)
30-Sep-17
Interest expense
$ 60.00
Interest payable
$ 60.00
(interest accrued on Pippen)
01-Oct-17
Cash
$ 16,500.00
Notes payable
$ 16,500.00
(notes payable issued to Prime Bank)
31-Oct-17
Interest expense
$ 170.00
Interest payable
$ 170.00
(interest accrued on Pippen 60 & Prime bank 110)
01-Nov-17
Vehicle
$ 34,000.00
Cash
$ 8,000.00
Notes Payable
$ 26,000.00
(notes issued)
30-Nov-17
Interest expense
$ 300.00
Interest payable
$ 300.00
(interest accrued on Pippen 60, Prime bank 110 & vehicle note 130)
01-Dec-17
Notes payable
$ 1,20,000.00
Interest payable
$ 1,800.00
Cash
$ 12,180.00
(notes repaid)
31-Dec-17
Interest expense
$ 240.00
Interest payable
$ 240.00
(interest accrued on Prime bank 110 & vehicle note 130)
Notes Issued
Notes repaid
Balance of Notes payable
Pippen
$ 12,000.00
$ (12,000.00)
$ -
Prime Bank
$ 16,500.00
$ -
$ 16,500.00
vehicle Notes
$ 26,000.00
$ -
$ 26,000.00
TOTAL
$ 42,500.00
Total Interest Expense for 2017
$ 770.00
Interest repaid of Pippen Note
($ 180.00 )
Interest payable balance
$ 590.00
Under Liabilities Section
Current liabilities:
Notes payable
$ 42,500.00
Interest payable
$ 590.00
Working
NOTES PAYABLE to
Pippen
Prime Bank
Purchase of Vehicle
TOTAL
A
Issued date
01-Sep-17
01-Oct-17
01-Nov-17
B
Amount
$ 12,000.00
$ 16,500.00
$ 26,000.00
$ 54,500.00
C
Term [months]
3
4
12
D=A+C
Maturity Date
01-Dec-17
01-Feb-18
01-Nov-18
E
Interest rate
6%
8%
6%
F=B x E
Annual Interest
$ 720.00
$ 1,320.00
$ 1,560.00
G = F/12
Monthly Interest
$ 60.00
$ 110.00
$ 130.00
Interest expenses:
Sep-17
$ 60.00
$ -
$ -
$ 60.00
Oct-17
$ 60.00
$ 110.00
$ -
$ 170.00
Nov-17
$ 60.00
$ 110.00
$ 130.00
$ 300.00
Dec-17
$ 110.00
$ 130.00
$ 240.00
2017 Interest expense
$ 180.00
$ 330.00
$ 260.00
$ 770.00