CH_13_BOOK_PROBLEMS_SOLUTIONS

CH_13_BOOK_PROBLEMS_SOLUTIONS - EXERCISE 13-2 (1520...

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EXERCISE 13-2 (15–20 minutes) (a) Sept. 1 Purchases. ............................................. 50,000 Accounts Payable. ....................... 50,000 Oct. 1 Accounts Payable. ................................ 50,000 Notes Payable. ............................. 50,000 Oct. 1 Cash. ....................................................... ................................................................ 75,000 Discount on Notes Payable. ................. 6,000 Notes Payable. ............................. 81,000 (b) Dec. 31 Interest Expense. .................................. 1,000 Interest Payable ($50,000 X 8% X 3/12). .............. 1,000 Dec. 31 Interest Expense. .................................. 1,500 Discount on Notes Payable ($6,000 X 3/12). .......................... 1,500
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EXERCISE 13-2 (Continued) (c) 1. Note payable. ................................. $50,000 Interest payable. ............................ 1,000 $51,000 2. Note payable. ................................. $81,000 Less discount ($6,000 – $1,500). . 4,500 $76,500 EXERCISE 13-3 (10–12 minutes) ALEXANDER COMPANY Partial Balance Sheet December 31, 2010 Current liabilities: Notes payable (Note 1). .................................................... $300,000 Long-term debt: Notes payable refinanced in February 2011 (Note 1). ... 900,000 Note 1. Short-term debt refinanced. As of December 31, 2010, the company had notes payable totaling $1,200,000 due on February 2, 2011. These notes were refinanced on their due date to the extent of $900,000 received from the issuance of common stock on January 21, 2011. The balance of $300,000 was liquidated using current assets. OR Current liabilities: Notes payable (Note 1). .................................................... $300,000 Long-term debt: Short-term debt expected to be refinanced (Note 1). .... 900,000 (Same footnote as above.)
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EXERCISE 13-4 (20–25 minutes) SANTANA COMPANY Partial Balance Sheet December 31, 2010 Current liabilities: Notes payable (Note 1). ................................................... $4,000,000* Long-term debt: Notes payable expected to be refinanced in 2011 (Note 1). .......................................................................... 3,000,000 Note 1. Under a financing agreement with Golden State Bank the Company may
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This note was uploaded on 09/20/2011 for the course ACCT 301 taught by Professor Staff during the Spring '11 term at S.F. State.

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CH_13_BOOK_PROBLEMS_SOLUTIONS - EXERCISE 13-2 (1520...

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