Question

Problem 7 : P12-32A

Background: Johnson Pharmacies entered into the transactions listed in the Transaction section below.

Assignment: 1) Using the General Journal tab, click Add Transaction to journalize each transaction. Click Post Transaction once you complete the entry, then repeat these steps for each transaction. 2) Click the Reports tab and review the results of recording these transactions on the General Ledger. 3) Click Submit Work when complete.

Transactions:

03/02/2018-- Borrowed $450,000 cash from Coconut Creek Bank. The 15-year, 5% note requires payments due annually on March 1. Each payment consists of $30,000 of principal plus one year's interest.

12/01/2018-- Mortgaged the warehouse for $250,000 cash with Saputo Bank. The mortgage requires monthly payment of $8,000. The interest rate on the note is 12% and accrues monthly. The first payment is due on January 1, 2019.

12/31/2018-- Recorded interest accrued on the Saputo Bank mortgage (round calculations to the nearest dollar).

12/31/2018-- Recorded interest accrued on the Coconut Creek Bank note (round calculations to the nearest dollar).

01/01/2019-- Paid Saputo Bank monthly mortgage payment (round calculations to the nearest dollar). 02/01/2019-- Paid Saputo Bank monthly mortgage payment (round calculations to the nearest dollar).

03/01/2019-- Paid Saputo Bank monthly mortgage payment (round calculations to the nearest dollar).

03/01/2019-- Paid first installment on note due to Coconut Creek Bank (round calculations to the nearest dollar).

Account # Description Type

10100 Cash Current Asset

10400 Accounts Receivable Current Asset

10500 Notes Receivable Current Asset

10550 Interest Receivable Current Asset

11000 Land Property, Plant, and Equipment

11150 Building Property, Plant, and Equipment

20100 Accounts Payable Current Liability

20200 Interest Payable Current Liability

20250 Salaries Payable Current Liability

21000 Notes Payable Long-term Liability

21050 Mortgage Payable Long-term Liability

30500 Common Stock Stockholders' Equity

30700 Retained Earnings Stockholders' Equity

40100 Sales Revenue Sales Revenue

50100 Cost of Goods Sold Cost of Goods Sold

50350 Salaries Expense Operating Expense

60100 Interest Revenue Other Revenue

70100 Interest Expense Other Expense

Answer 1

Date	General Journal	Debit	Credit
03/02/18	Cash	$ 4,50,000.00
	Notes Payable		$ 4,50,000.00
12/01/18	Cash	$ 2,50,000.00
	Mortgage Payable		$ 2,50,000.00
12/31/2018	Interest Expenses = 250,000 x 12%/ x 1/12	$      2,500.00
	Interest payable		$      2,500.00
12/31/2018	Interest Expenses = 450,000 x5%/ x 10/12	$    18,750.00
	Interest payable		$    18,750.00
01/01/19	Interest Payable	$      2,500.00
	Mortgage Payable	$      5,500.00
	Cash		$      8,000.00
02/02/19	Interest Expenses	$      2,445.00
	Mortgage Payable	$      5,555.00
	Cash		$      8,000.00
03/01/19	Interest Expenses	$      2,389.45
	Mortgage Payable	$      5,610.55
	Cash		$      8,000.00
03/01/19	Interest Payable	$    18,750.00
	Interest Expense (450,000 x 5% x 2/12)	$      3,750.00
	Notes Payable	$    30,000.00
	Cash		$    52,500.00
	Amortization schedule for the Saputo Bank mortgage to 1,
Date	Monthly Payment	Interest Expense = 12%/12 x Ending balan.	Principal reduction	Ending balance
12/31/2018				$ 2,50,000.00
01/01/19	8000	$      2,500.00	$      5,500.00	$ 2,44,500.00
02/01/19	8000	$      2,445.00	$      5,555.00	$ 2,38,945.00
03/01/19	8000	$      2,389.45	$      5,610.55	$ 2,33,334.45
04/01/19	8000	$      2,333.34	$      5,666.66	$ 2,27,667.79
05/01/19	8000	$      2,276.68	$      5,723.32	$ 2,21,944.47