Red Bank Enterprises was involved in the following transactions

Question # 00002967 Posted By: expert-mustang Updated on: 10/30/2013 02:40 AM Due on: 10/30/2013
Subject Accounting Topic Accounting Tutorials:
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Red Bank Enterprises was involved in the following transactions during the fiscal year ending October 31:


Borrowed $75,000 from the Bank of Kingsville by signing a 120-day note.


Issued a $40,000 note to Harris Motors for the purchase of a $40,000 de­livery truck. The note is due in 180 days and carries a 12% interest rate.


Purchased merchandise from Pans Enterprises in the amount of $15,000. Issued a 30-day, 12% note in settlement of the balance owed.


Issued a $60,000 note to Datatex Equipment in settlement of an overdue account payable of the same amount. The note is due in 30 days and car­ries a 14% interest rate.


The note to Pans Enterprises was paid in full.

10/31: The note to Datatex Equipment was paid in full.

11/30: Paid note to Bank of Kingville

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a. Prepare journal entries to record the transactions.

b. Prepare adjusting entries on October 31 to record accrued interest.

c. Prepare the Current Liability section of Red Bank’s balance sheet as of October 31. Assume that the Accounts Payable account totals $203,600 on this date.

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Tutorials for this Question
  1. Tutorial # 00002784 Posted By: expert-mustang Posted on: 10/30/2013 02:40 AM
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    The solution of Red Bank Enterprises was involved in the following transactions...
    Red_Bank_Enterprise.xlsx (12.49 KB)

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