Chapter 14, Problem P14.39BPGB

Journalizing liability transactions and reporting them on the balance sheet

Learning Objectives 1, 5 2. Total Liabilities $661,776

2018

Mar. 1 Borrowed $390,000 from Bartow Bank. The six-year, 13% note requires payments due annually, on March 1. Each payment consists of $65,000 principal plus one year's interest.

Oec.1 Mortgaged the warehouse for $350,000 cash with Saylor Bank. The mortgage requires monthly payments of $7,000. The interest rate on the note is 9% and accrues monthly. The first payment is due on January 1, 2019.

31 Recorded interest accrued on the Saylor Bank note.

31 Recorded interest accrued on the Bartow Bank note.

2019

Jan. 1 Paid Saylor Bank monthly mortgage payment.

Feb. 1 Paid Saylor Bank monthly mortgage payment.

Mar. 1 Paid Saylor Bank monthly mortgage payment.

1 Paid first installment on note due to Bartow Bank.

Requirements

1. Journalize the transactions in the Great Value Pharmacies general journal Round to the nearest dollar Explanations are not required

2 Prepare the liabilities section of the balance sheet for Great Value Pharmacies on March 1, 2019 after all the journal entries are recorded