1) Waren has a $60,000 two-year note payable to First American Bank & Trust dated December 18, 2017. The stated annual interest rate on the note is 5%. The terms of the note payable call for the following payments:

• $3,000 interest payments on 12/18/18 and 12/18/19

• $60,000 principal payment on 12/18/19

Interest accruals are calculated using a 365-day year with the day after the note was made counting as the first day. General ledger account numbers for the journal entry are: #40800 (Interest expense) and #20900 (Interest payable). Show your calculation.

2) Bad debt expense is estimated once annually at the end of each year as 2/5 of one percent (0.004) of net sales and is recorded in the general journal as of December 31. The "allowance" method of recording bad debt expense is used. General ledger account numbers for the journal entry are: #40900 (Bad debt expense) and #10300 (Allowance for doubtful accounts). Sales debit =76885, sales credit = 1666,912, sales returns and allowances debit/ credit = 61,106, sales discounts taken credit =17272.44, sales discounts taken debit = 1,866.62. Show your calculation.

3) Assume that corporate income tax rates for 2017 are: 15% of the first $50,000 of income, plus 25% of the next $25,000, plus 34% of the next $25,000, plus 39% of the next $235,000. The remaining tax brackets are not listed because they aren't applicable to Waren's level of pre-tax income. General ledger account numbers for the journal entry are: #40700 (Federal income tax expense) and #20700 (Federal income taxes payable). Show your calculation below

Answer rating: 100% (QA)

Adjusting Entry as on 31st December 1 Accrued Interest Expense Journal Entry Interest Expens... View the full answer