Recorded the adjusting entry for accrued interest

Assignment Help Accounting Basics
Reference no: EM13994796

Camden Biotechnology began operations in September 2011. The following selected transactions relate to liabilities of the company for September 2011 through March 2012. Camden's fiscal year ends on December 31. Its financial statements are issued in April.

2011

a. On September 5, opened checking accounts at Second Commercial Bank and negotiated a short-term line of credit of up to $15,000,000 at the bank's prime rate (10.5% at the time). The company will pay no commitment fees.

b. On October 1, borrowed $12 million cash from Second Commercial Bank under the line of credit and issued a five-month promissory note. Interest at the prime rate of 10% was payable at maturity. Management planned to issue 10-year bonds in February to repay the note.

c. Received $2,600 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 $4,100,000. 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.

2012

f. In February, issued $10 million of 10-year bonds at face value and paid the bank loan on the March 1 due date.

g. Half of the storage containers covered by refundable deposits were returned in March. The remaining containers are expected to be returned during the next six months.

Required:

1. Prepare the appropriate journal entries for these transactions.

2. Prepare the current and long-term liability sections of the December 31, 2011, balance sheet. Trade accounts payable on that date were $252,000.

Reference no: EM13994796

Questions Cloud

Internal revenue service : The Internal Revenue Service permits manufacturing equipment used in agricultural production (including centrifuges) to be depreciated to a zero salvage value over a 5-year life. Assuming that Permian Basin Proteins has a tax rate of 30 percent an..
Calculate the change in energy for the reaction : write down the decay process for carbon-10. calculate the change in energy for the reaction?
Determine whether there is an arbitrage opportunity : Bob likes the chances of Seattle against the Chargers.  He is willing to give 3:2 odds. To explain, she is will to bet the Charges will win where for every two dollars you bet with her, she will return 1 dollar if Seattle wins. Determine whether ther..
What is the max energy a particle can achieve : Write the equation for Lorentz force by a magnetic field on a moving charge. Explain what is a cyclotron with diagrams, details on how it works, with relevant equations. For a cyclotron of radius R, what is the max energy a particle can achieve?
Recorded the adjusting entry for accrued interest : Prepare the current and long-term liability sections of the December 31, 2011, balance sheet. Trade accounts payable on that date were $252,000.
Find the equivalent resistance between points a and b : Find the equivalent resistance between points a and b in the figure. Calculate the current in each resistor if a potential difference of 26.0 V is applied between points a and b.
Discount rate will lead to an increase in the federal funds : The prime rate, and other interest rates, offered by banks often change in the same direction as a change in the Fed’s target for the federal funds rate. As an employee of a Federal Reserve District Bank you have been told that your District Bank wil..
Relationship between magnetic force and magnetic field : Write a proportionality expression that represents the relationship between Magnetic Force and Current. What relationship exists between the magnetic force and length of conductor in the magnetic field?
Aperformance engineer or a developer or a dba : Current course or workplace would be like for example I am a Software Engineer working as a Performance Engineer or a developer or a DBA. The paper should describe the work a person does in an IT field. Paper should not contain any Plagiarism.

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  Lambert invests 10000 for a 13 interest in a partnership in

lambert invests 10000 for a 13 interest in a partnership in which the other partners have capital totaling 26000 before

  Fogelberg corporation is a regional company which is an sec

fogelberg corporation is a regional company which is an sec registrant. the corporations securities are thinly traded

  What are the three levels of network platforms

What are the three levels of network platforms that are utilized in e-business and which groups use each level?

  Calculate the sustainable growth rate

Operational, Financial and degree of Combined leverage. Calculate the sustainable growth rate and if new funds are required too sustain a 15% increase in sales for 2013

  Prepare a schedule of cost of goods sold

Prepare a multi step income statement.

  Collegebooks company has two locations downtown and on

collegebooks company has two locations downtown and on campus. during march the company reported net income of 237000

  Explain how the lack of an ongoing accounts payable system

Explain how the lack of an ongoing accounts payable system will affect the auditor tests for the purchases and payables cycle. Your answer should also identify assertions and account balances affected.

  Winston company has two regional divisions the east

winston company has two regional divisions the east division and the west division. the board of directors has

  Using the book value method, would recording the conversion

How should gain or loss on early extinguishment of debt be determined? Does the early extinguishment of the 7% bonds result in a gain or loss? Explain.

  Two products if and ri emerge from a joint process product

two products if and ri emerge from a joint process. product if has been allocated 24300 of the total joint costs of

  That old equipment for producing subassemblies is worn out

that old equipment for producing subassemblies is worn out said bruce truesdale president of truesdale company. we need

  Rachel lives and works in chicago she is the regional sales

1. tcos 1 and 2 discuss the differences between federal court and the united states tax court for litigating tax

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd