This exercise continues the Lawlor Lawn Service, Inc., situation from Exercise 10-23 of Chapter 10. Assume that Lawlor also owes $120,000 on a 10-year, 6% mortgage that was issued on August 1, 2012. Monthly payments of $1,000 of principal plus interest will be made on the first day of each month, beginning on September 1, 2012.
Requirements
1. Journalize the entry for the note issuance on August 1, 2012; the reclassification of the current portion of the note payable; the first payment on September 1, 2012; and any adjusting entries needed at September 30, 2012.
2. Considering only this note, prepare the liabilities section of the balance sheet for Lawlor Lawn Service as of September 30, 2012.
3. Journalize the October 1, 2012 note payment.