Question

The following are selected transactions of Astin Corporation during year 2020.

On September 1^st, Astin Corp. purchased inventory from Encino Company on account for $50,000. Prepare the journal entry for Astin Corp. to record this credit purchase, assuming Astin Corp. uses the gross method and the periodic inventory system (1.5 points).

	Debit	Credit

On October 1^st, Astin Corp. issued a $50,000, 12-month, 8% note to Encino Company as the payment for the credit purchase made on September 1^st. Prepare the journal entry for Astin Corp. to record the issue of this note (1.5 points).

	Debit	Credit

Prepare Astin Corp.’s adjusting entry for this note on December 31^st, 2020 (fiscal year end) (1.5 points).

	Debit	Credit

Compute the total liability regarding this note that need to be reported on Astin Corp.’s balance sheet on December 31^st, 2020 (fiscal year end) (0.5 point).

Answer 1