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a.Accounts Payable$110,000b.Not recorded as a liabilityc.Estimated liability for product warenty$2,200d.Dividends Payable$70,000e.Bonuses Payable$30,000
Current LiabilityAn accountable transaction has not yet occurred.Current LiabilityCurrent LiabilityCurrent Liability
Although the likelihood of default is low, disclosure is required for credit guarantees.Both accrual and disclosure is required since the likelihood is probable and the amount is estimable.Disclosure is required because the amount is deemed possible, but not probable.
General JournalDateDescriptiona.Apr. 8Accounts Payable- Bennett Co.Notes Payable- Bennett Co.Issued a $4800 note payable.15-May CashNotes Payable- Lincoln BankBorrowed $36000 from bank for 60 days at 9%.22-Jun Notes Payable- Bennett Co.Interest ExpenseCashPaid the principal and interst due on the April 8th note payable.6-Jul InventoryNotes Payable- Bolton Co.Purchased $12000 of merchandise and issued a 90 day note with 10% interest.
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Generally Accepted Accounting Principles,Default,Promissory note,Lincoln Bank