Managing Current Liabilities in Accounting: Workbook Exercises

School: New Brunswick Community College, Fredericton - Course: ACCT FINANCIAL - Subject: Accounting

Current Liability Workbook S 11-6 - WB 342, TB 638 Short Term Note Payable On December 31, 2019, Jabot purchased $16,000 of equipment on a one-year, 9 percent note payable. Journalize the company's purchase of equipment, the accrual of interest expense on May 31, 2020 (its fiscal year end), and the payment of the note plus interest on December 31,2020. (We will use months not days) DateExplanationDebitCredit Dec 31Equipment16,000 Notes Payable - Short term16,000 Set up one year note May 31, 2020Interest Expense600 Interest Payable600 To accrue interest at year end that we owe Dec 31, 2020Notes Payable - Short16,000 Interest Payable600 Interest Expense (16000x9%x7/12)840 Cash17,440 E 11-1 , TB 640 Short Term Note Payable Record the following note payable transactions of Lambda Company in the company's general journal. June 1, 2019 Purchased a delivery truck costing $86,000 by issuing a one-year, 6% note payable DateExplanationDebitCredit June 1Truck86,000 Note Payable86,000 Set up one year note

Current Liability Workbook Dec 31, 2019 Accrued interest on the note payable DateExplanationDebitCredit Dec 31, 2019Interest Expense3010 Interest Payable3010 To accrue interest Jun 1, 2020 paid the note payable at maturity DateExplanationDebitCredit June 1, 2020Notes Payable - Short term86,000 Interest Payable3010 Interest Expense2150 Cash91160 S 11-3 WB 342, TB 637 GST (HST Works the same) On July 10, Keller Company, a business located in Alberta (GST = 5% and no provincial taxes), purchased a $15,000 of inventory for resale on account. On July 25, Keller recorded the sale of that merchandise on account for $20,000 plus tax. On August 10, Keller remitted HST to the receiver General. DateExplanationDebitCredit July 10Inventory15,000 GST Recoverable - Asset750 Accounts Payable15,750 Purchase Inventory with GST July 25Accounts Receivable21,000 Sales Revenue20,000 GST payable - liability1,000 To record sales with GST Aug 10GST Payable1,000 GST Recoverable750 Cash250 To remit to the receiver