ollowing information applies to the questions displayed below.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![Required Information
[The following information applies to the questions displayed below.]
A company incurred the following transactions:
a. Recorded the financing (capital) lease of a truck. The present value of the lease payments is $68,000; the total of the
lease payments to be made is $81,000.
b. Recorded the company's payroll for the month. Gross pay was $7,800, net pay was $5,400, and various withholding
liability accounts were credited for the difference.
c. Issued $24,000 of bonds payable at a price of 103.
d. Adjusted the estimated liability under a warranty program by reducing previously accrued warranty expense by $4,500.
e. Retired $14,000 face amount of bonds payable with a carrying value of $13,500 by calling them at a redemption value
of 101.
f. Accrued estimated annual health care costs for retirees: $19,500 is expected to be paid within a year, and $158,000 is
expected to be paid in more than a year.
Required:
a-1. Show the effect, if any, of each transaction/adjustment on the appropriate balance sheet category or on net income by selecting
for each category affected the account name and amount, and indicating whether it is an addition (+) or a subtraction (-). Items that
affect net income should not also be shown as affecting stockholders' equity.
Transaction /
Adjustment
a.
b.
C.
d.
f.
Current Asset
Bonds payable -14,000
Bonds payable -24,000
Bonds payable +14,000
Bonds payable +24,000
Non-Current Asset
Current Liabilities
Non-Current Liabilities
Stockholders' Equity
Net Income](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6db4719a-9a82-4a68-9040-c81531e716f9%2F1b580da8-e3f5-4a5f-9e95-84e1cd7d23d0%2Fmiphqdu_processed.png&w=3840&q=75)
Transcribed Image Text:Required Information
[The following information applies to the questions displayed below.]
A company incurred the following transactions:
a. Recorded the financing (capital) lease of a truck. The present value of the lease payments is $68,000; the total of the
lease payments to be made is $81,000.
b. Recorded the company's payroll for the month. Gross pay was $7,800, net pay was $5,400, and various withholding
liability accounts were credited for the difference.
c. Issued $24,000 of bonds payable at a price of 103.
d. Adjusted the estimated liability under a warranty program by reducing previously accrued warranty expense by $4,500.
e. Retired $14,000 face amount of bonds payable with a carrying value of $13,500 by calling them at a redemption value
of 101.
f. Accrued estimated annual health care costs for retirees: $19,500 is expected to be paid within a year, and $158,000 is
expected to be paid in more than a year.
Required:
a-1. Show the effect, if any, of each transaction/adjustment on the appropriate balance sheet category or on net income by selecting
for each category affected the account name and amount, and indicating whether it is an addition (+) or a subtraction (-). Items that
affect net income should not also be shown as affecting stockholders' equity.
Transaction /
Adjustment
a.
b.
C.
d.
f.
Current Asset
Bonds payable -14,000
Bonds payable -24,000
Bonds payable +14,000
Bonds payable +24,000
Non-Current Asset
Current Liabilities
Non-Current Liabilities
Stockholders' Equity
Net Income
![Required Information
[The following information applies to the questions displayed below.]
A company incurred the following transactions:
a. Recorded the financing (capital) lease of a truck. The present value of the lease payments is $68,000; the total of the
lease payments to be made is $81,000.
b. Recorded the company's payroll for the month. Gross pay was $7,800, net pay was $5,400, and various withholding
liability accounts were credited for the difference.
c. Issued $24,000 of bonds payable at a price of 103.
d. Adjusted the estimated liability under a warranty program by reducing previously accrued warranty expense by $4.500.
e. Retired $14,000 face amount of bonds payable with a carrying value of $13,500 by calling them at a redemption value
of 101.
f. Accrued estimated annual health care costs for retirees; $19,500 is expected to be paid within a year, and $158,000 is
expected to be paid in more than a year.
a-2. Record the journal entries to show each transaction/adjustment. (If no entry is required for a transaction/event, select "No
journal entry required" in the first account field.)
View transaction list
Journal entry worksheet
<
1
Recorded th
lease payme
$81,000.
Note: Enter debil
Transaction
a.
2
Record entry
3 4 5 6
No journal entry required
Accounts payable
Accounts receivable
Accumulated depreciation
Clear entry
is
Credit
View general journal
>](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6db4719a-9a82-4a68-9040-c81531e716f9%2F1b580da8-e3f5-4a5f-9e95-84e1cd7d23d0%2Fzhiemnc_processed.png&w=3840&q=75)
Transcribed Image Text:Required Information
[The following information applies to the questions displayed below.]
A company incurred the following transactions:
a. Recorded the financing (capital) lease of a truck. The present value of the lease payments is $68,000; the total of the
lease payments to be made is $81,000.
b. Recorded the company's payroll for the month. Gross pay was $7,800, net pay was $5,400, and various withholding
liability accounts were credited for the difference.
c. Issued $24,000 of bonds payable at a price of 103.
d. Adjusted the estimated liability under a warranty program by reducing previously accrued warranty expense by $4.500.
e. Retired $14,000 face amount of bonds payable with a carrying value of $13,500 by calling them at a redemption value
of 101.
f. Accrued estimated annual health care costs for retirees; $19,500 is expected to be paid within a year, and $158,000 is
expected to be paid in more than a year.
a-2. Record the journal entries to show each transaction/adjustment. (If no entry is required for a transaction/event, select "No
journal entry required" in the first account field.)
View transaction list
Journal entry worksheet
<
1
Recorded th
lease payme
$81,000.
Note: Enter debil
Transaction
a.
2
Record entry
3 4 5 6
No journal entry required
Accounts payable
Accounts receivable
Accumulated depreciation
Clear entry
is
Credit
View general journal
>
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