Camden Biotechnology began operations in September 2021. The following selected transactions relate to liabilities of the...

Transcribed Image Text:

Camden Biotechnology began operations in September 2021. The following selected transactions relate to liabilities of the company for September 2021 through March 2022. Camden's fiscal year ends on December 31. Its financial statements are issued in April. 2021 a. On September 5, opened checking accounts at Second Commercial Bank and negotiated a short-term line of credit of up to $23,000,000 at the bank's prime rate (9.5% at the time). The company will pay no commitment fees. b. On October 1, borrowed $20 million cash from Second Commercial Bank under the line of credit and issued a five-month promissory note. Interest at the prime rate of 9% was payable at maturity. Management planned to issue 10-year bonds in February to repay the note. c. Received $1,800 of refundable deposits in December for reusable containers used to transport and store chemical-based products. d. For the September-December period, sales on account totaled $4,740,000. The state sales tax rate is 3% and the local sales tax rate is 3%. (This is a summary journal entry for the many individual sales transactions for the period.) e. Recorded the adjusting entry for accrued interest. 2022 f. In March, paid the entire amount of the note on its March 1 due date, using proceeds from a February issuance of $17.5 million of 10- year bonds at face value, along with other available cash. g. The storage containers covered by refundable deposits are expected to be returned during the first nine months of the year. Half of the containers were returned in March 2022. Required: 1. Prepare the appropriate journal entries for items a-g. 2. Prepare the current and long-term liability sections of the December 31, 2021, balance sheet. Trade accounts payable on that date were $296,000. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the appropriate journal entries for items a-g. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) View transaction list Journal entry worksheet 2 3 4 5 7 8 Journal entry worksheet 2 3 4 5 6 7 8 > 1 Record opening of checking accounts at Second Commercial Bank and negotiated a short-term line of credit of up to $23,000,000 at the bank's prime rate (9.5% at the time). The company will pay no commitment fees. Note: Enter debits before credits. Transaction General Journal Debit Credit 4 5 6 7 8 > 1 2 3 Record the borrowing of $20 million cash and issuance of five-month promissory note. Interest at the prime rate of 9% was payable at maturity. Management planned to issue 10-year bonds in February to repay the note. Note: Enter debits before credits. Transaction General Journal Debit Credit b く 1 2 4 5 6 7 8 <> Record receipt of $1,800 of refundable deposits in December for reusable containers used to transport and store chemical-based products. Note: Enter debits before credits. Transaction General Journal Debit Credit 3. 1 2 4 5 6 7 8 > Record for the September-December period, sales on account totaled $4,740,000. The state sales tax rate is 3% and the local sales tax rate is 3%. Note: Enter debits before credits. Transaction General Journal Debit Credit d 3. 1 2 3 6 7 8 5 Recorded the adjusting entry for accrued interest. Note: Enter debits before credits. Transaction General Journal Debit Credit e 4. < 1 2 3 4 5 7 8 > 6 Record issuance of $17.5 million of 10-year bonds. Note: Enter debits before credits. Transaction General Journal Debit Credit f-1 1 2 3 4 5 6 > 7 8 Record the payment of the bank loan due on March 1. Note: Enter debits before credits. Transaction General Journal Debit Credit f-2 1 2 3 4 5 6 7 8 Record half of the storage containers covered by refundable deposits were returned in March. The remaining containers are expected to be returned during the next six months. Note: Enter debits before credits. Transaction General Journal Debit Credit Required 1 Required 2 Prepare the current and long-term liability sections of the December 31, 2021, balance sheet. Trade accounts payable on that date were $296,000. (Enter your answers in whole dollars.) Camden Biotechnology Balance Sheet (partial) At December 31, 2021 Current liabilities: Total current liabilities $ Long-term liabilities: Camden Biotechnology began operations in September 2021. The following selected transactions relate to liabilities of the company for September 2021 through March 2022. Camden's fiscal year ends on December 31. Its financial statements are issued in April. 2021 a. On September 5, opened checking accounts at Second Commercial Bank and negotiated a short-term line of credit of up to $23,000,000 at the bank's prime rate (9.5% at the time). The company will pay no commitment fees. b. On October 1, borrowed $20 million cash from Second Commercial Bank under the line of credit and issued a five-month promissory note. Interest at the prime rate of 9% was payable at maturity. Management planned to issue 10-year bonds in February to repay the note. c. Received $1,800 of refundable deposits in December for reusable containers used to transport and store chemical-based products. d. For the September-December period, sales on account totaled $4,740,000. The state sales tax rate is 3% and the local sales tax rate is 3%. (This is a summary journal entry for the many individual sales transactions for the period.) e. Recorded the adjusting entry for accrued interest. 2022 f. In March, paid the entire amount of the note on its March 1 due date, using proceeds from a February issuance of $17.5 million of 10- year bonds at face value, along with other available cash. g. The storage containers covered by refundable deposits are expected to be returned during the first nine months of the year. Half of the containers were returned in March 2022. Required: 1. Prepare the appropriate journal entries for items a-g. 2. Prepare the current and long-term liability sections of the December 31, 2021, balance sheet. Trade accounts payable on that date were $296,000. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the appropriate journal entries for items a-g. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) View transaction list Journal entry worksheet 2 3 4 5 7 8 Journal entry worksheet 2 3 4 5 6 7 8 > 1 Record opening of checking accounts at Second Commercial Bank and negotiated a short-term line of credit of up to $23,000,000 at the bank's prime rate (9.5% at the time). The company will pay no commitment fees. Note: Enter debits before credits. Transaction General Journal Debit Credit 4 5 6 7 8 > 1 2 3 Record the borrowing of $20 million cash and issuance of five-month promissory note. Interest at the prime rate of 9% was payable at maturity. Management planned to issue 10-year bonds in February to repay the note. Note: Enter debits before credits. Transaction General Journal Debit Credit b く 1 2 4 5 6 7 8 <> Record receipt of $1,800 of refundable deposits in December for reusable containers used to transport and store chemical-based products. Note: Enter debits before credits. Transaction General Journal Debit Credit 3. 1 2 4 5 6 7 8 > Record for the September-December period, sales on account totaled $4,740,000. The state sales tax rate is 3% and the local sales tax rate is 3%. Note: Enter debits before credits. Transaction General Journal Debit Credit d 3. 1 2 3 6 7 8 5 Recorded the adjusting entry for accrued interest. Note: Enter debits before credits. Transaction General Journal Debit Credit e 4. < 1 2 3 4 5 7 8 > 6 Record issuance of $17.5 million of 10-year bonds. Note: Enter debits before credits. Transaction General Journal Debit Credit f-1 1 2 3 4 5 6 > 7 8 Record the payment of the bank loan due on March 1. Note: Enter debits before credits. Transaction General Journal Debit Credit f-2 1 2 3 4 5 6 7 8 Record half of the storage containers covered by refundable deposits were returned in March. The remaining containers are expected to be returned during the next six months. Note: Enter debits before credits. Transaction General Journal Debit Credit Required 1 Required 2 Prepare the current and long-term liability sections of the December 31, 2021, balance sheet. Trade accounts payable on that date were $296,000. (Enter your answers in whole dollars.) Camden Biotechnology Balance Sheet (partial) At December 31, 2021 Current liabilities: Total current liabilities $ Long-term liabilities:

Answer rating: 100% (QA)

1 Journal Entry Camden Biotechnology Date Account titles and Explanation Debit Credit 2021 ... View the full answer