Question

Great Adventures Problem AP9-1 (GL) Tony’s favorite memories of his childhood were the times he spent with his dad at camp. Tony was daydreaming of those days a bit as he and Suzie jogged along a nature trail and came across a wonderful piece of property for sale. He turned to Suzie and said, “I’ve always wanted to start a camp where families could get away and spend some quality time together. If we just had the money, I know this would be the perfect place.” On November 1, 2022, Great Adventures purchased the land by issuing a $780,000, 6%, 10-year installment note to the seller. Payments of $8,660 are required at the end of each month over the life of the 10-year loan. Each monthly payment of $8,660 includes both interest expense and principal payments (i.e., reduction of the loan amount). Late that night Tony exclaimed, “We now have land for our new camp; this has to be the best news ever!” Suzie said, “There’s something else I need to tell you. I’m expecting!” They decided right then, if it was a boy, they would name him Venture.

1. Record each of the transactions listed above in the 'General Journal' tab. Review the 'General Ledger' and the 'Trial Balance' tabs to see the effect of the transactions on the account balances.
2. Prepare an income statement for the period ended December 31, 2022, in the 'Income Statement' tab.
3. Prepare a classified balance sheet as of December 31, 2022 in the 'Balance Sheet' tab.
4. Record the closing entries in the 'General Journal' tab.

1.) Record the issuance of the long-term note payable for the purchase of land on November 1, 2022.

Journal entry worksheet

2.) Record the first monthly payment on the long-term note payable, made on November 30, 2022.

3.) Record the second monthly payment on the long-term note payable, made on December 31, 2022.

4.) The 12 monthly payments in 2023 (following year) will reduce the note's balance by an additional $59,301. Record the reclassification of this amount from long-term notes payable to current notes payable.

5.) Prepare the closing entry for revenue accounts.

6.) Prepare the closing entry for expense and loss accounts.

Answer 1