Question

Current Attempt in Progress Wildhorse Corporation sells rock-climbing products and also operates an indoor climbing facility for climbing enthusiasts. During the last part of 2022, Wildhorse had the following transactions related to notes payable. Sept. 1 Issued a $13,200 note to Pippen to purchase inventory. The 3-month note payable bears interest of 9% and is due December 1. (Wildhorse uses a perpetual inventory system.) Sept. 30 Recorded accrued interest for the Pippen note. Oct. 1 Issued a $22.800,9%, 4-month note to Prime Bank to finance the purchase of a new climbing wall for advanced climbers. The note is due February 1. Oct. 31 Recorded accrued interest for the Pippen note and the Prime Bank note. Nov.1 issued a $24,000 note and paid $7.600 cash to purchase a vehicle to transport clients to nearby climbing sites as part of a new series of climbing classes. This note bears interest of 6% and matures in 12 months. Nov. 30 Recorded accrued interest for the Pippen note, the Prime Bank note, and the vehicle note. Dec 1 Paid principal and interest on the Pippen note. Dec. 31 Recorded accrued interest for the Prime Bank note and the vehicle note.

Answer 1

Dec-01 To Cash / Bank Note Payable 13200 Sep-01 By Pippen Oct-01 By Prime Bank Nov-01 By Vehicle 13200 22800 24000 Dec-31 To Balance C/f 46800 60000 60000 Note 4 Dec-01 To Cash/ bank Interest Payable 1188 Sep-30 By Interest expenses Oct-31 By Interest expenses Nov-30 By Interest expenses Dec-31 By Interest expenses 1779 396 Note 1 909 Note 2 1029 Note 3 633 Note 4 Dec-31 To Balance C/f 2967 2967

Interest Expenses 396 909 Dec-31 By Profit and Loss A/C 1029 633 Sep-30 To Interest Payable Oct-31 To Interest Payable Nov-30 To Interest Payable Dec-31 To Interest Payable 2967 This is interest expenses during the year 2967 2967 Note 1 Note 2 Note 3 Note 4 13200*9%*1/3 13200*9% 1/3 Plus 22800*9%/4 13200*9%*1/3 Plus 22800*9%/4 Plus 24000*6%/12 Interest of Only pippen that is 9% of 13200 paid It it assumed by me that the interest rates are absolute for the period of the note as it is not specifically given per annum and note per annum. If this interest rates are per annum then the calculation of interest should be made annually. Extract of Balance sheet Current Liabilities Interest Payable Notes Payable 1779 46800