Answer:
1)
Apr. 30 Received $645,000 from Commerce Bank after signing a 12-month, 6 percent, promissory note.
Dr Cash 645,000
Cr Notes payable - Commerce Bank 645,000
June 6 Purchased merchandise on account at a cost of $78,000. (Assume a perpetual inventory system.)
Dr Merchandise inventory 78,000
Cr Accounts payable 78,000
July 15 Paid for the June 6 purchase.
Dr Accounts payable 78,000
Cr Cash 78,000
Aug. 31 Signed a contract to provide security service to a small apartment complex and collected six months’ fees in advance amounting to $25,800. (Use an account called Unearned Revenue.)
Dr Cash 25,800
Cr Unearned service revenue 25,800
Dec. 31 Determined salary and wages of $43,000 were earned but not yet paid as of December 31 (ignore payroll taxes).
Dr Wages expense 43,000
Cr Wages payable 43,000
Dec. 31 Adjusted the accounts at year-end, relating to interest.
Dr Interest expense 25,800 ($645,000 x 6% x 8/12)
Cr Accrued interest payable - notes payable 25,800
Dec. 31 Adjusted the accounts at year-end, relating to security service.
Dr Unearned service revenue 17,200 ($25,800 x 4/6)
Cr Service revenue 17,200
2) Current liabilities:
Unearned service revenue $8,600
Wages payable $43,000
Notes payable - Commerce Bank $645,000
Interest payable - notes payable $25,800
