Does the interest expense in table look reasonable, or does it need an adjustment at the end of the year?
|
End of First Year |
||
|
Debits |
Credits |
|
|
Cash |
$559,750 |
|
|
Accounts Receivable |
$645,000 |
|
|
Allowance for Doubtful Accounts |
$0 |
|
|
Inventory |
$3,725,000 |
|
|
Prepaid Expenses |
$185,000 |
|
|
Property, Plant & Equipment |
$1,150,000 |
|
|
Accumulated Depreciation |
$0 |
|
|
Accounts Payable |
$309,500 |
|
|
Accrued Expenses Payable |
$108,500 |
|
|
Short-term Notes Payable |
$350,000 |
|
|
Long-term Notes Payable |
$500,000 |
|
|
Owners’ Equity – Capital Stock |
$1,500,000 |
|
|
Owners’ Equity – Retained Earnings |
$0 |
|
|
Sales Revenue |
$4,585,000 |
|
|
Cost of Goods Sold Expense |
$0 |
|
|
Depreciation Expense |
$0 |
|
|
Bad Debts Expense |
$0 |
|
|
Selling & General Expenses |
$1,033,000 |
|
|
Interest Expense |
$55,250 |
|
|
Totals |
$7,353,000 |
$7,353,000 |