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ober 1, borrowed $14 million cash from Second Commercial Bank under the line of credit and issue ory note. Interest at the prime rate of 12% was payable at maturity. Management planned to issue 10 y to repay the note. ed $4,800 of refundable deposits in December for reusable containers used to transport and store c S. September-December period, sales on account totaled $4,700,000. The state sales tax rate is 3% and the 3%. (This is a summary journal entry for the many individual sales transactions for the period.)

ober 1, borrowed $14 million cash from Second Commercial Bank under the line of credit and issue ory note. Interest at the prime rate of 12% was payable at maturity. Management planned to issue 10 y to repay the note. ed $4,800 of refundable deposits in December for reusable containers used to transport and store c S. September-December period, sales on account totaled $4,700,000. The state sales tax rate is 3% and the 3%. (This is a summary journal entry for the many individual sales transactions for the period.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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i.3

Camden Biotechnology began operations in September 2024. The following selected transactions relate to liabilities of the company for September 2024 through March 2025. Camden's fiscal year ends on December 31. Its financial statements are issued in April. 2024 a. On September 5, opened checking accounts at Second Commercial Bank and negotiated a short-term line of credit of up to $17,000,000 at the bank's prime rate (12.5% at the time). The company will pay no commitment fees. b. On October 1, borrowed $14 million cash from Second Commercial Bank under the line of credit and issued a five-month promissory note. Interest at the prime rate of 12% was payable at maturity. Management planned to issue 10-year bonds in February to repay the note. c. Received $4,800 of refundable deposits in December for reusable containers used to transport and store chemical-based products. d. For the September-December period, sales on account totaled $4,700,000. The state sales tax rate is 3% and the local sales tax rate is 3%. (This is a summary journal entry for the many individual sales transactions for the period.) e. Recorded the adjusting entry for accrued interest. 2025 f. In March, paid the entire amount of the note on its March 1 due date, using proceeds from a February issuance of $12.0 million of 10-year bonds at face value, along with other available cash. g. The storage containers covered by refundable deposits are expected to be returned during the first nine months of the year. Half of the containers were returned in March 2025. Required: 1. Prepare the appropriate journal entries for items a-g. 2. Prepare the current and long-term liability sections of the December 31, 2024, balance sheet. Trade accounts payable on that date were $325,000. Complete this question by entering your answers in the tabs below. Required 1 Prepare the appropriate journal entries for items a-g. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars. Required 2 View transaction list Journal entry worksheet 1 2 Transaction a 3 Note: Enter debits before credits. 4 5 Record opening of checking accounts at Second Commercial Bank and negotiated a short-term line of credit of up to $17,000,000 at the bank's prime rate (12.5% at the time). The company will pay no commitment fees. 6 General Journal 7 8 Debit Credit
Transcribed Image Text:Camden Biotechnology began operations in September 2024. The following selected transactions relate to liabilities of the company for September 2024 through March 2025. Camden's fiscal year ends on December 31. Its financial statements are issued in April. 2024 a. On September 5, opened checking accounts at Second Commercial Bank and negotiated a short-term line of credit of up to $17,000,000 at the bank's prime rate (12.5% at the time). The company will pay no commitment fees. b. On October 1, borrowed $14 million cash from Second Commercial Bank under the line of credit and issued a five-month promissory note. Interest at the prime rate of 12% was payable at maturity. Management planned to issue 10-year bonds in February to repay the note. c. Received $4,800 of refundable deposits in December for reusable containers used to transport and store chemical-based products. d. For the September-December period, sales on account totaled $4,700,000. The state sales tax rate is 3% and the local sales tax rate is 3%. (This is a summary journal entry for the many individual sales transactions for the period.) e. Recorded the adjusting entry for accrued interest. 2025 f. In March, paid the entire amount of the note on its March 1 due date, using proceeds from a February issuance of $12.0 million of 10-year bonds at face value, along with other available cash. g. The storage containers covered by refundable deposits are expected to be returned during the first nine months of the year. Half of the containers were returned in March 2025. Required: 1. Prepare the appropriate journal entries for items a-g. 2. Prepare the current and long-term liability sections of the December 31, 2024, balance sheet. Trade accounts payable on that date were $325,000. Complete this question by entering your answers in the tabs below. Required 1 Prepare the appropriate journal entries for items a-g. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars. Required 2 View transaction list Journal entry worksheet 1 2 Transaction a 3 Note: Enter debits before credits. 4 5 Record opening of checking accounts at Second Commercial Bank and negotiated a short-term line of credit of up to $17,000,000 at the bank's prime rate (12.5% at the time). The company will pay no commitment fees. 6 General Journal 7 8 Debit Credit
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