Consider the following note payable transactions of Cabico Video Productions. Data table: 2017 Sep.1 Purchased equipment costing $26,000 by issuing a one-year, 6% note payable. Dec. 31 Accrued interest on the note payable. 2018 Sep.1 Paid the note payable plus interest at maturity. Requirements: Journalize the transactions for the company. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.)
Consider the following note payable transactions of Cabico Video Productions. Data table: 2017 Sep.1 Purchased equipment costing $26,000 by issuing a one-year, 6% note payable. Dec. 31 Accrued interest on the note payable. 2018 Sep.1 Paid the note payable plus interest at maturity. Requirements: Journalize the transactions for the company. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Consider the following note payable transactions of Cabico Video Productions.
Data table:
2017
Sep.1 Purchased equipment costing $26,000 by issuing a one-year,
6% note payable.
Dec. 31 Accrued interest on the note payable.
2018
Sep.1
Paid the note payable plus interest at maturity.
Requirements:
Journalize the transactions for the company. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.)

Transcribed Image Text:**Journal Entry for Subscription Sale with Sales Tax**
**Transaction Date:** October 1
**Description of Transaction:** On October 1, a six-month subscription was sold, starting on November 1. The transaction involved collecting cash amounting to $600 along with a sales tax of 6%. The task is to prepare a single compound journal entry for this transaction.
**Journal Entry Table Overview:**
The table is structured to assist with the recording of accounting transactions. The table includes the following columns:
1. **Date**: The date on which the transaction occurred.
2. **Accounts and Explanation**: The accounts impacted by the transaction and a brief explanation.
3. **Debit**: The debit amounts associated with the transaction.
4. **Credit**: The credit amounts associated with the transaction.
Below is a detailed transcription of the journal entry table provided in the image:
| Date | Accounts and Explanation | Debit | Credit |
|---------|---------------------------|-------|--------|
| Oct. 1 | | | |
| | | | |
| | | | |
| | | | |
**Explanation of Entry Components:**
- **Date**: Marks the time the transaction was recorded.
- **Accounts and Explanation**:
- **Cash**: Records the asset account increased by the receipt of cash.
- **Unearned Subscription Revenue**: Reflects the liability account for revenues received before they are earned.
- **Sales Tax Payable**: A liability account for the sales tax that needs to be paid.
- **Debit**:
- Cash will be debited with the total cash received (subscription fee + sales tax).
- **Credit**:
- Unearned Subscription Revenue will be credited with the amount of the subscription fee.
- Sales Tax Payable will be credited with the amount of the sales tax collected.
Given the sale amount of $600 and a 6% sales tax, the calculations would be:
- Sales Tax: $600 x 6% = $36
- Cash collected: $600 + $36 = $636
**Completed Journal Entry Example:**
| Date | Accounts and Explanation | Debit | Credit |
|---------|-------------------------------|-------|--------|
| Oct. 1 | Cash | 636 | |
| | Unearned Subscription Revenue | | 600
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