..UNIT 7 EXERCISE BUSI 1043.......docx - UNIT 7 EXERCISE...

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UNIT 7 EXERCISE BUSI 1043 KARANVEER SINGH BATH 2019070335 Question 1Time Traveler Magazine completed the following transactions during 2016:Aug 31: Sold one-year subscriptions, collecting cash of $1,500, plus HST of 13%.Time Traveler MagazineDateAccountDebitCreditAug 31stCash1,695Unearned Revenue1,500HST (1,500* 13%)195Dec 31: Remitted (paid) HST to Canada Revenue Agency (CRA).Time Traveler MagazineDateAccountDebitCreditDec 31stHST195Cash195Dec 31: Made the necessary adjustment at year-end.Time Traveler Magazine DateAccountDebitCreditDec 31stUnearned Revenue195(1,500/12) * 4Revenue 195Note: 4 months, September, October, November, DecemberQuestion 2During its first year of operations Keene Limited had sales of $76,500. The company offers a 2-year limited warranty on all sales and expects that warranty costs for the first year will average 0.5% of sales with an additional 1.5% in the second year. During the current year the company spent $1,200 on warranty repairs.Prepare all journal entries related to the warranty for the current year. How will the warranty liability be reported on the company’s year-end balance sheet?
Current liabilities: Warranty payable 330 (1530-1200) Question 3On January 31, 2016 Muscle Sports Cars issued 10-year, 6% bonds with a face value of $100,000. The bonds were issued at 97 and pay interest on January 31 and July 31. Muscle amortizes their bonds by the straight-line method.Record (a) issuance of the bonds on January 31, (b) the semi-annual interest payment and discount amortization on July 31, and (c) the interest accrual and discount amortization on December 31.

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