Notes payable.
Sentry Security Systems purchased $72,000 of office equipment on April 1, 19X3, by signing a three-year, 12% note payable to Sharp, Inc. One-third of the principal, along with interest on the outstanding balance, is payable each April 1 until maturity. (The first payment is due in 19X4.)
a. Fill in the following table to reflect Sentry’s liabilities, assuming a March 31 year-end.
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March 31 |
19X4 |
19X5 |
19X6 |
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Current liabilities: |
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Current portion of long-term debt |
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Interest payable |
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Long-term liabilities: |
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Long-term debt |
b. Assuming that interest is properly recorded at the end of each year, present the proper journal entry to record the last payment on April 1, 19X6.