Seidman products began operations in 2009. the following, Ask an Expert

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Seidman Products began operations in 2009. The following selected transactions occurred from September 2009 through March 2010. Seidman's fiscal year ends on December 31.

2009:
(a) On September 5, Seidman opened a checking account and negotiated a short-term line of credit of up to $10,000,000 at 10% interest that it can borrow funds by drawing on it at any point in time. The company is not required to pay any commitment fees.
(b) On October 1, Seidman borrowed $8,000,000 cash and issued a 5-month promissory note with 10% interest payable at maturity.
(c) Seidman received $3,000 of refundable deposits in December for reusable containers.
(d) For the September through December period, sales totaled $5,000,000. The state sales tax rate is 4% and 75% of sales are subject to sales tax.
(e) Seidman recorded accrued interest.

2010:
(f) Seidman paid the promissory note on the March 1 due date.
(g) Half of the storage containers are returned in March, with the other half expected to be returned over the next 6 months.

REQUIRED:
1. Prepare the appropriate journal entries for the 2009 transactions.
2. Prepare the appropriate journal entries for the 2010 transactions.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M991625

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