>Problems Group A 12-32A Journalizing liability transactions and reporting them

Question

>Problems Group A 12-32A Journalizing liability transactions and reporting them on the balance L The following transactions of Johnson Pharmacies occurred during 2018 and 2019: 2 sheet 2018 Borrowed $450,000 from Coconut Creek Bank. The 15-year, 5% note requires payments due annually, on March 1. Each payment consists of $30,000 principal plus one year's interest. Mortgaged the warehouse for $250,000 cash with Saputo Bank. The mortgage requires monthly payments of $8,000. The interest rate on the note is 12% and accrues monthly. The first payment is due on January 1, 2019 Recorded interest accrued on the Saputo Bank note. Recorded interest accrued on the Coconut Creek Bank note. Mar. 1 Dec. 1 31 31 2019 Jan. 1 Paid Saputo Bank monthly mortgage payment. Feb. 1 Paid Saputo Bank monthly mortgage payment. Mar. 1 Paid Saputo Bank monthly mortgage payment. 1 Paid first installment on note due to Coconut Creek Bank. Requirements 1. Journalize the transactions in the Johnson Pharmacies general journal. Round to the nearest dollar. Explanations are not required. 2. Prepa re the liabilities section of the balance sheet for Johnson Pharmacies on March 1, 2019 after all the journal entries are recorded.

Explanation / Answer

01-Mar Cash 450000 to 5 % note payable 450000 01-Dec Cash 250000 to Saputo Bank 250000 31-Dec Interest 2500 (250000*12%*1/12) to Interest Payable 2500 31-Dec Interest 18750 (450000*5%*10/12) to Interest Payable 18750 2019 01-Jan Saputo Bank 8000 Interest Payable 2500 to Cash 10500 01-Feb Saputo Bank 8000 Interest expenses 2420 {(250000-8000)*12%*1/12)} to Cash 10420 01-Mar Saputo Bank 8000 Interest expenses 2340 {(250000-16000)*12%*1/12)} to Cash 10340 01-Mar 5% Note Payable 30000 Interest Payble 18750 (450000*5%*10/12) Interest expenses 3750 (450000*5%*2/12) to Cash 52500 Liabilities Borrowing from coconut creek bank 420000 Payable to Saputo Bank 234000

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