Question 2:

On December 5, 2016, Super Circuit Store sold gift certificates totaling $12,000. By December 31, 2016, all but $2,300 worth of these certificates had been redeemed for merchandise. Outstanding certificates were then redeemed by January 15, 2017.

Required:

1.	Prepare journal entries on Super Circuits books to reflect the preceding transactions.
2.	How would the gift certificates be reported on Super Circuits balance sheet on December 31, 2016?

Short-Term Debt Expected to Be Refinanced On December 31, 2016, Carrboro Textile Company had short-term debt in the form of notes payable totaling $650,000. These notes were due on June 1, 2017. Carrboro expected to refinance these notes on a long-term basis. On February 1, 2017, Carrboro entered into an agreement with Worldwide Life Insurance Company whereby Worldwide will lend Carrboro $520,000, payable in 5 years at 12%. The money will be available to Carrboro on May 20, 2017. Carrboro issues its December 31, 2016, year-end financial statements on March 2, 2017 Required: 1. Show how the $650,000 notes payable will be classified on Carrboro Textile's balance sheet on December 31, 2016. CARRBORO TEXTILE COMPANY Partial Balance Sheet December 31, 2016 Current Liabilities: Notes payable Long-Term Liabilities: Notes payable 2. If short-term debt that is expected be refinanced is classified as a long-term liability the company has shown its intent and ability to refinance at which point it is to classify the obligation as a long-term liability. it is probable and reasonably estimable its intent and ability it is reasonably possible and financially flexible