Resources: Ch. 10 of Financial Accounting.
Complete Exercise E10-6, E10-9 & E10-18.
Complete Problem 10-2A & 10-5A.
E10-6 According to the accountant of Ulner Inc., its payroll taxes for the week were as follows:
$198.40 for FICA taxes, $19.84 for federal unemployment taxes, and $133.92 for state
unemployment taxes.
Instructions
Journalize the entry to record the accrual of the payroll taxes.
E10-9 Northeast Airlines is considering two alternatives for the financing of a purchase of a
fleet of airplanes.These two alternatives are:
*E10-18 Hrabik Corporation issued $600,000, 9%, 10-year bonds on January 1, 2011, for
$562,613.This price resulted in an effective-interest rate of 10% on the bonds. Interest is payable
semiannually on July 1 and January 1. Hrabik uses the effective-interest method to amortize
bond premium or discount.
P10-2A The following are selected transactions of Winsky Company.Winsky prepares financial
statements quarterly.
Jan. 2 Purchased merchandise on account from Yokum Company, $30,000, terms 2/10, n/30.
Feb. 1 Issued a 9%, 2-month, $30,000 note to Yokum in payment of account.
and so on ....
P10-5A Fordyce Electronics issues a $400,000, 8%, 10-year mortgage note on December 31,
2010. The proceeds from the note are to be used in financing a new research laboratory. The
terms of the note provide for semiannual installment payments, exclusive of real estate taxes and
insurance, of $29,433. Payments are due June 30 and December 31.
Instructions
(a) Prepare an installment payments schedule for the first 2 years.
(b) Prepare the entries for (1) the loan and (2) the first two installment payments.
(c) Show how the total mortgage liability should be reported on the balance sheet at December
31, 2011.
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