Horngren's Financial & Managerial Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText -- Access Card Package (5th Edition)

5th Edition

ISBN: 9780134078908

Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura

Publisher: PEARSON

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Textbook Question

Chapter 12, Problem 12.31AP

Journalizing liability transactions and reporting them on the balance sheet

T he following transactions of Smith Pharmacies occurred during 2016 and 2017:

2016
Mar. 1	Borrowed $240,000 from Naples Bank. The eight-year, 7% note requires payments due annually, on March 1. Each payment consists of $30,000 principal plus one year's interest.
Dec. 1	Mortgaged the warehouse for $ 150,000 cash with Sawyer Bank. The mortgage requires monthly payments of $6,000. The interest rate on the note is 11% and accrues monthly. The first payment is due on January 1, 2017.
31	Recorded interest accrued on the Sawyer Bank note.
31	Recorded interest accrued on the Naples Bank note.
2017
Jan. 1	Paid Sawyer Bank monthly mortgage payment.
Feb. 1	Paid Sawyer Bank monthly mortgage payment.
Mar. 1	Paid Sawyer Bank monthly mortgage payment.
1	Paid first installment on note due to Naples Bank.

Requirements

1. Journalize the transactions in the Smith Pharmacies general journal. Round all answers to the nearest dollar. Explanations are not required.

2. Prepare the liabilities section of the balance sheet for Smith Pharmacies on March 1, 2017 after all the journal entries are recorded.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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Chapter 12, Problem 12.30E

Chapter 12, Problem 12.32AP

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Chapter 12 Solutions

Horngren's Financial & Managerial Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText -- Access Card Package (5th Edition)

Ch. 12 - Flipco signed a 10-year note payable on January 1,...Ch. 12 - Daniels's bonds payable carry a stated interest...Ch. 12 - A bond that matures in installments at regular...Ch. 12 - Prob. 4QC Ch. 12 - Nicholas Smith Fitness Gym has 700,000 of 20-year...Ch. 12 - Prob. 6QC Ch. 12 - Prob. 7QC Ch. 12 - The debt to equity ratio is calculated as a. Total...Ch. 12 - Mike Gordon wishes to have 80,000 in five years....Ch. 12 - Prob. 10BQC

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Solution Summary: The author explains that Liabilities are the claims against the resources that a business owes to outsiders of the company.

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