Jasper Sports Limited purchased inventory costing $10,000 by signing a 10% short-term note payable. The purchase occurred

Question:

Jasper Sports Limited purchased inventory costing $10,000 by signing a 10% short-term note payable. The purchase occurred on March 31, 2017. Jasper pays annual interest each year on March 31. Journalize Jasper's
(a) Purchase of inventory,
(b) Accrual of interest expense on December 31, 2017, and
(c) Payment of the note plus interest on March 31, 2018.
This short exercise works with exercise S8-1.
1. Refer to the data in S8-1. Show what the company would report on its at December 31, 2017, and on its income statement for the year ended on that date.
2. What one item will the for the year ended December 31, 2018, report? Identify the financial statement, the item, and its amount.
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