60.1K

Verified Solution

Link Copied!

Camden Biotechnology began operations in September 2024 . The following selected transactions reiate to liabilities of the company for September 2024 through March 2025. Camden's fiscal year ends on December 31 its financial statements are issued in Apnil 2024 a. On September 5, opened checking accounts at Second Commercial Bank and negotiated a short-term line of credit of up to $24,000,000 at the bank's prime rate (10.5\% at the time). The company will pay no commitment fees. b. On October 1, borrowed $21 million cash from Second Commercial Bank under the line of credit and issued a five-month promissory note. Interest of the prime rate of 10% was payable at maturisy. Management planned to issue 10 year bonds in February to repay the note. c. Recelved $4,500 of refundoble deposits in December for reusable containers used to transport and store chemical-based products. d. For the September-December period, sales on account totaled $4,440,000. The state sales tax rate is 3% and the local sales tax rate is 3\%. (This is a summary journal entry for the many individual sales transactions for the period.) e. Recorded the adjusting entry for accrued interest. 2025 f. In March, paid the entire amount of the note on its March 1 due date, using proceeds from a February issuance of 516.5 millon of 10 -year bonds at face value, aiong with other avallable cash. 9. The storage containers covered by refundable deposits are expected to be returned dunng the first nine months of the year Half of the containers were returned in March 2025. Required: 1. Prepare the appropriate journal entries for items a-g- 2. Prepare the current and long-term liability sections of the December 31, 2024, balance sheet. Trade accounts payable on that date were $267,000

Answer & Explanation Solved by verified expert

See Answer