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Question: glencoe inc operates with a june 30 yearend during 2017...

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Glencoe Inc. operates with a June 30 year-end. During 2017, the following transactions occurred:

  1. January 1: Signed a one-year, 10% loan for $25,000. Interest and principal are to be paid at maturity.
  2. January 10: Signed a line of credit with Little Local Bank to establish a $400,000 line of credit. Interest of 9% will be charged on all borrowed funds.
  3. February 1: Issued a $20,000 non-interest-bearing, six-month note to pay for a new machine. Interest on the note, at 12%, was deducted in advance.
  4. March 1: Borrowed $150,000 on the line of credit.
  5. June 1: Repaid $100,000 on the line of credit plus accrued interest.
  6. June 30: Made all necessary adjusting entries.
  7. August 1: Repaid the non-interest-bearing note.
  8. September 1: Borrowed $200,000 on the line of credit.
  9. November 1: Issued a three-month, 8%, $12,000 note in payment of an overdue open account.
  10. December 31: Repaid the one-year loan [from transaction (a)] plus accrued interest.

Required:

1. Identify and analyze the effect of these transactions. Do not round intermediate calculations. If required, round your final answers to the nearest dollar.

a. January 1: Signed a one-year, 10% loan for $25,000. Interest and principal are to be paid at maturity.

b. January 10: Signed a line of credit with Little Local Bank to establish a $400,000 line of credit. Interest of 9% will be charged on all borrowed funds.

c. February 1: Issued a $20,000 non-interest-bearing, six-month note to pay for a new machine. Interest on the note, at 12%, was deducted in advance

d. March 1: Borrowed $150,000 on the line of credit

e. June 1: Repaid $100,000 on the line of credit plus accrued interest.

f. June 30: Made all necessary adjusting entries

The adjustment to amortize the discount on the note:

g. August 1: Repaid the non-interest-bearing note.

h. September 1: Borrowed $200,000 on the line of credit.

i. November 1: Issued a three-month, 8%, $12,000 note in payment of an overdue open account.

j. December 31: Repaid the one-year loan [from transaction (a)] plus accrued interest.

2. As of December 31, which notes are outstanding? How much interest is due on each? Do not round intermediate calculations. If required, round your final answers to the nearest dollar.

Outstanding Debt Principal Balance Interest Payable
Line of credit $ $
8% Note $ $
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