Liabilities WorksheetPart 1. Current Liabilitiesa. Define current liabilities, identify where they are reported, and provide two examples of these liabilities. Answer in the space below.b. Paisley Electronics sells $16,500 in electronics equipment to customers on February 27. The sales tax rate on these sales is 6%. Prepare the journal entry to record the sales and the corresponding sales tax. Enter your answers in the shaded boxes below.General JournalDateAccount NamesDebitCreditFeb 27To record salesc. Fiesta Entertainment sells $67,000 worth of tickets in advance of a 5-day food and wine festival running June 22-26. All sales were for cash.Prepare the journal entries to record the advance ticket sales on June 15, and the revenue earned for the first day of the festival. Assume that each of the five days of the festival represents 1/5 of the advance ticket sales. Enter your answers in the shaded boxes.General JournalDateAccount NamesDebitCreditJun 15To record unearned revenueGeneral JournalDateAccount NamesDebitCreditJun 22To record revenue earnedPart 2. Notes Payable. Tangerine Labs borrows $126,000 on March 28, by signing a 90-day, 8% note.Prepare the journal entries to record the issuance of the note and the payment of the note at maturity.General JournalDateAccount NamesDebitCreditMar. 28To record note general JournalDateAccount NamesDebitCreditJun 25To record payment of note and interestb. On November 1, Sommers Inc. borrows $180,000 by signing a 2-year, 5% note.
Annual interest is paid on June 30. Sommers has a December 31 year-end.Prepare the journal entries to record the issuance of the note and the accrued interest on December 31.General JournalDateAccount NamesDebitCreditNov. 1To record noteGeneral JournalDateAccount NamesDebitCreditDec. 31To record accrued interest on notePart 3. BondsWinterbank Productions issues $4 million of 4-year, 8 percent bonds on January 1, 2013. Interest is payable on July 1 and January 1, and financial statements are prepared on December 31. Winterbank uses the straight-line amortization method.a. Prepare the journal entries for 2013, assuming the bonds were issued at 98.General JournalDateAccount NamesDebitCreditJan. 1General JournalDateAccount NamesDebitCreditJul. 1General JournalDateAccount NamesDebitCreditDec. 31b. Prepare the journal entries for 2013, assuming the bonds were issued at 103.General JournalDateAccount NamesDebitCreditJan. 1General JournalDateAccount NamesDebitCreditJul. 1General JournalDateAccount NamesDebitCreditDec. 31Liabilities WorksheetPart 1. Current Liabilitiesa. Define current liabilities, identify where they are reported, and provide two examples of these liabilities. Answer in the space below.b. Paisley Electronics sells $16,500 in electronics equipment to customers on February 27. The sales tax rate on these sales is 6%. Prepare the journal entry to record the sales and the corresponding sales tax. Enter your answers in the shaded boxes below.General JournalDateAccount NamesDebitCreditFeb 27To record salesc. Fiesta Entertainment sells $67,000 worth of tickets in advance of a 5-day food and wine festival running June 22-26. All sales were for cash.Prepare the journal entries to record the advance ticket sales on June 15, and the revenue earned for the first day of the festival. Assume that each of the five days of the festival represents 1/5 of the advance ticket sales. Enter your answers in the shaded boxes.General JournalDateAccount NamesDebitCreditJun 15To record unearned revenueGeneral JournalDateAccount NamesDebitCreditJun 22To record revenue earnedPart 2. Notes Payablea. Tangerine Labs borrows $126,000 on March 28, by signing a 90-day, 8% note.Prepare the journal entries to record the issuance of the note and the payment of the note at maturity.General JournalDateAccount NamesDebitCreditMar. 28To record noteGeneral JournalDateAccount NamesDebitCreditJun 25To record payment of note and interestb. On November 1, Sommers Inc. borrows $180,000 by signing a 2-year, 5% note. Annual interest is paid on June 30. Sommers has a December 31 year-end.Prepare the journal entries to record the issuance of the note and the accrued interest on December 31.General JournalDateAccount NamesDebitCreditNov. 1To record noteGeneral JournalDateAccount NamesDebitCreditDec. 31To record accrued interest on notePart 3. BondsWinterbank Productions issues $4 million of 4-year, 8 percent bonds on January 1, 2013. Interest is payable on July 1 and January 1, and financial statements are prepared on December 31. Winterbank uses the straight-line amortization method.a. Prepare the journal entries for 2013, assuming the bonds were issued at 98.General JournalDateAccount NamesDebitCreditJan. 1General JournalDateAccount NamesDebitCreditJul. 1General JournalDateAccount NamesDebitCreditDec. 31b. Prepare the journal entries for 2013, assuming the bonds were issued at 103.General JournalDateAccount NamesDebitCreditJan. 1General JournalDateAccount NamesDebitCreditJul. 1General JournalDateAccount NamesDebitCreditDec. 31
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