Assignment 3

Presented here are liability items for Sage Hill Inc. at December 31, 2022. Accounts payable $251,200 FICA taxes payable $12,480 Notes payable (due May 1, 2023) 32,000 Interest payable 64,000 Bonds payable (due 2026) 1,440,000 Notes payable (due 2024) 128,000 Unearned rent revenue 384,000 Income taxes payable 5,600 Discount on bonds payable 65,600 Sales taxes payable 2,720

Current Liabilities: Notes Payable: 32,000 Accounts Payable: 251,200 Interest Payable: 64,000 FICA Taxes Payable: 12,480 Income Taxes Payable: 5,600 Sales Taxes Payable: 2,720 Unearned Rent Revenue: 384,000 Total Current Liabilities: 752,000 Long-term Liabilities Bonds Payable: 1,440,000 Less: Discount on Bonds Payable: 65,600 1,374,4000 Notes Payable: 128,000 Total Long-term Liabilities: 1,502,400 Total Liabilities: 2,254,400

A. Whispering Winds Corp. issued 2,600 5%, 8-year, $1,000 bonds dated January 1, 2022, at face value. Interest is paid each January 1. Prepare the journal entry to record the sale of these bonds on January 1, 2022.

Debit: Cash for 2,600,000 (2,600 x 1,000) Credit: Bonds Payable for 2,600,000

A. Sheridan Company issued $312,000, 9%, 15-year bonds on December 31, 2021, for $299,520. Interest is payable annually on December 31. Sheridan uses the straight-line method to amortize bond premium or discount. The issuance of the bonds.

Debit: Cash for 299,520 Discount on Bonds Payable for 12,480 (312,000-299,520) Credit: Bonds Payable for 312,000

A. Crane Company issues $3.3 million, 10-year, 9% bonds at 96, with interest payable on December 31. The straight-line method is used to amortize bond discount. Prepare the journal entry to record the sale of these bonds on January 1, 2022.

Debit: Cash for 3,168,000 (3,300,000 x .96) Discount on Bonds Payable for 132,000 (3,300,000-3,168,000) Credit: Bonds Payable for 3,300,000

A. On August 1, 2022, Martinez Corp. issued $489,600, 6%, 10-year bonds at face value. Interest is payable annually on August 1. Martinez's year-end is December 31. Prepare the journal entry to record the issuance of the bonds.

Debit: Cash for 489,600 Credit: Bonds Payable for 489,600

B. Prepare the journal entry to record the accrual of interest on December 31, 2022.

Debit: Interest Expense for 12,240 (489,600 x .06 x 5/12) Credit: Interest Payable for 12,240

B. Prepare the adjusting journal entry on December 31, 2022, to record interest expense.

Debit: Interest Expense for 130,000 (2,600,000 x .05 x 12/12) Credit: Interest Payable for 130,000

C. Prepare the journal entry to record the payment of interest on January 1.

Debit: Interest Payable for 36,900 Credit: Cash for 36,900

C. The payment of interest on January 1, 2023.

Debit: Interest Payable for 40,320 Credit: Cash for 40,320

B. Journalize the adjusting entries at January 31 for the outstanding note payable and for salaries and wages expense and payroll tax expense.

(To record the interest on outstanding notes payable) Debit: Interest Expense for 75 Credit: Interest Payable for 75 (To record payroll and withholding taxes) Debit: Salaries and Wages Expense for 94,000 Credit: FICA Taxes for 7,191 Federal Income Taxes Payable for 5,486 State Income Taxes Payable for 1,646 Salaries and Wages Payable for 79,677 (To record employer's payroll taxes) Credit: Payroll Tax Expense for 7,191 Debit: FICA Taxes Payable for 7,191

A. On January 1, 2022, the ledger of Cullumber Company contained these liability accounts. Accounts Payable $43,900 Sales Taxes Payable 8,000 Unearned Service Revenue 20,400 During January, the following selected transactions occurred. Jan. 1Borrowed $18,000 in cash from Apex Bank on a 4-month, 5%, $18,000 note. 5. Sold merchandise for cash totaling $6,572, which includes 6% sales taxes. 12. Performed services for customers who had made advance payments of $12,000. (Credit Service Revenue.) 14. Paid state treasurer's department for sales taxes collected in December 2021, $8,000. 20. Sold 640 units of a new product on credit at $48 per unit, plus 5% sales tax. During January, the company's employees earned wages of $94,000. Withholdings related to these wages were $7,191 for Social Security (FICA), $5,486 for federal income tax, and $1,646 for state income tax. The company owed no money related to these earnings for federal or state unemployment tax. Assume that wages earned during January will be paid during February. No entry had been recorded for wages or payroll tax expense as of January 31. Journalize the January transactions.

1. Debit: Cash for 18,000 Credit: Notes Payable for 18,000 5. Debit: Cash for 6,572 Credit: Sales for 6,200 (6,572/1.06) Credit: Sales Taxes Payable for 372 (6,572-6,200) 12. Debit: Unearned Service Revenue for 12,000 Credit: Service Revenue for 12,000 14. Debit: Sales Taxes Payable for 8,000 Credit: Cash for 8,000 20. Debit: Accounts Receivable for 32,256 Credit: Sales for 30,720 (640 x 48) Credit: Sales Taxes Payable for 1,536 (30,720 x .05)

A. Windsor, Inc. reports the following liabilities (in thousands) on its December 31, 2022, balance sheet and notes to the financial statements. Accounts payable $4,260.0 Mortgage payable $6,743.0 Unearned rent revenue 1,055.0 Notes payable (due in 2025) 332.0 Bonds payable 1,950.0 Salaries and wages payable 855.0 Current portion of mortgage payable 1,989.0 Notes payable (due in 2023) 2,560.0 Income taxes payable 262.0 Warranty liability—current 1,414.0

Accounts Payable: Current Liability Unearned rent revenue: Current Liability Bonds Payable: Long-term Liability Current portion of mortgage payable: Current Liability Income Taxes Payable: Current Liability Mortgage Payable: Long-term Liability Notes Payable (due in 2025): Long-term Liability Salaries and wages payable: current liability Notes payable (due in 2023): Current Liability Warrant liability-current: Current Liability

C. Prepare the current liabilities section of the balance sheet at January 31, 2022. Assume no change in Accounts Payable.

Current Liabilities Accounts Payable 43,900 Sales Taxes Payable 1,908 Interest Payable 75 Salaries and Wages Payable 79,677 FICA Taxes Payable 14,382 Federal Income Taxes Payable 5,486 State Income Taxes Payable 1,646 Notes Payable 18,000 Unearned Service Revenue 8,400 Total Current Liabilities 173,474

B. Prepare the liabilities section of Windsor's balance sheet as at December 31, 2022.

Current Liabilities: Notes Payable: 2,560.0 Accounts Payable: 4,260.0 Income Taxes Payable: 262.0 Mortgage Payable: 1,989.0 Warranty Liability: 1,414.0 Salaries and Wages Payable: 855.0 Unearned Rent Service: 1,055.0 Total Current Liabilities: 12,395.0 Long-term Liabilities: Notes Payable: 332.0 Bonds Payable: 1,950.0 Mortgage Payable: 6,743.0 Total Long-term Liabilities: 9,025.0 Total Liabilities: 21,420.0

C. Prepare the journal entry to record the payment of interest on August 1, 2023.

Debit: Interest Payable for 12,240 Interest Expense for 17,136 (29,376-12,240) Credit: Cash for 29,376 (489,600 x .06 x 12/12)

C. Prepare the journal entry on January 1, 2023, to record interest paid.

Debit: Interest Payable for 130,000 Credit: Cash for 130,000

C. The redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded.

Debit: Bonds Payable for 312,000 Credit: Cash for 312,000

D. The redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded.

Debit: Bonds Payable for 504,000 Credit: Cash for 504,000

A. On January 1, Blossom Company issued $369,000, 10%, 10-year bonds at face value. Interest is payable annually on January 1. Prepare the journal entry to record the issuance of the bonds.

Debit: Cash for 369,000 Credit: Bonds Payable for 369,000

A. Crane Company issued $495,000, 15-year, 5% bonds at 96. Prepare the journal entry to record the sale of these bonds on January 1, 2022.

Debit: Cash for 475,200 (495,000 x .96) Discounts on Bonds Payable for 19,800 (495,000-475,200) Credit: Bonds Payable for 495,000

A. Teal Mountain Inc. issues $5.0 million, 10-year, 8% bonds at 101, with interest payable on January 1. The straight-line method is used to amortize bond premium. Prepare the journal entry to record the sale of these bonds on January 1, 2022.

Debit: Cash for 5,050,000 (5,000,000 x 1.01) Credit: Premium on Bonds Payable for 50,000 (5,050,000-5,000,000) Bonds Payable for 5,000,000

A. Sunland Company issued $504,000, 8%, 30-year bonds on January 1, 2022, at 102. Interest is payable annually on January 1. Sunland uses straight-line amortization for bond premium or discount. The issuance of the bonds.

Debit: Cash for 514,080 (504,000 x 1.02) Credit: Premium on Bonds Payable for 10,080 (514,080-504,000) Bonds Payable for 504,000

A. Blossom Company issued $730,000, 10-year, 6% bonds at 103. Prepare the journal entry to record the sale of these bonds on January 1, 2022.

Debit: Cash for 751,900 (730,000 X 1.03) Credit: Premium on Bonds Payable for 21,900 (751,900-730,000) Bonds Payable for 730,000

B. The payment of interest and the discount amortization on December 31, 2022.

Debit: Interest Expense for 28,912 (28,080+832) Credit: Discount on Bonds Payable for 832 (12,480/15) Cash for 28,080 (312,000 x .09 x 12/12)

B. Prepare the journal entry to record interest expense and bond discount amortization on December 31, 2022, assuming no previous accrual of interest.

Debit: Interest Expense for 310,200 (297,000+13,200) Credit: Discount on Bonds Payable for 13,200 (132,000/10) Cash for 297,000 (3,300,000 x .09 x 12/12)

B. Prepare the journal entry to record the accrual of interest on December 31.

Debit: Interest Expense for 36,900 (369,000/10) Credit: Interest Payable for 36,900

B. The accrual of interest and the premium amortization on December 31, 2022.

Debit: Interest Expense for 39,984 (40,320-336) Premium on Bonds Payable for 336 (10,080/30) Credit: Interest Payable for 40,320 (504,000 x .08 x 12/12)

B. Prepare the journal entry to record interest expense and bond premium amortization on December 31, 2022, assuming no previous accrual of interest.

Debit: Interest Expense for 395,000 (400,000-5,000) Premium on Bonds Payable for 5,000 (50,000/10) Credit: Interest Payable for 400,000 (5,000,000 x .08 x 12/12)

B. Suppose the remaining Premium on Bonds Payable was $13,140 on December 31, 2025. Show the balance sheet presentation on this date.

Long-term Liabilities Bonds Payable: 730,000 Add: Premium on Bonds Payable: 13,140 743,140

B. Suppose the remaining Discount on Bonds Payable was $11,880 on December 31, 2027. Show the balance sheet presentation on this date.

Long-term Liabilities Bonds Payable: 495,000 Less: Discounts on Bonds Payable: 11,880 483,120