Question

The following transactions of Johnson Pharmacies occurred during 2014 and 2015:
2014
Mar. 1 Borrowed $ 100,000 from Naples Bank. The five-year, 15% note requires payments due annually, on March 1. Each payment consists of $ 20,000 principal plus one year’s interest.
Dec. 1 Mortgaged the warehouse for $ 400,000 cash with Sage Bank. The mortgage requires monthly payments of $ 8,000. The interest rate on the note is 7% and accrues monthly. The first payment is due on January 1, 2015.
31 Recorded interest accrued on the Sage Bank note.
31 Recorded interest accrued on the Naples Bank note.
2015
Jan. 1 Paid Sage Bank monthly mortgage payment.
Feb. 1 Paid Sage Bank monthly mortgage payment.
Mar. 1 Paid Sage Bank monthly mortgage payment.
1 Paid first installment on note due to Naples Bank.

Requirements
1. Journalize the transactions in the Johnson Pharmacies general journal. Round all answers to the nearest dollar. Explanations are not required.
2. Prepare the liabilities section of the balance sheet for Johnson Pharmacies on March 1, 2015.



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  • CreatedJanuary 16, 2015
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