The following transactions of Johnson Pharmacies occurred during 2014 and 2015:

2014

Mar 1 Borrowed $100,000 from Naples Bank. The five-year, 15% note requires payments due annually, on March 1. Each payment consists of $20,000 principal plus one year’s interest.

Mar 1 Reclassified current portion of the Naples Bank note

Dec 1 Mortgaged the warehouse for $400,000 cash with Sage Bank. The mortgage requires monthly payments of $8,000. The interest rate on the note is 7% and accrues monthly. The first payment is due on January 1, 2015.

Dec 1 Reclassified current portion of the Sage Bank note for the principal due in 2015 of $70,634

Dec 31 Recorded interest accrued on the Sage Bank note

Dec 31 Recorded interest accrued on the Naples Bank note

2015

Jan 1 Paid Sage Bank monthly mortgage payment

Feb 1 Paid Sage Bank monthly mortgage payment

Mar 1 Paid Sage Bank monthly mortgage payment

Mar 1 Paid first installment on note due to Naples Bank

Requirement

1. Journalize the transactions in Johnson Pharmacies’ general journal. Round all answers to the nearest dollar. Explanations are not required.

2. Assume Johnson Pharmacies only adjusts the current portion of long-term notes on the last day of each year, December 31. Prepare the liabilities section of the balance sheet for Johnson Pharmacies on March 1, 2015.