Red Bank Enterprises was involved in the following transactions during the fiscal year ending October 31:
Borrowed $75,000 from the Bank of Kingsville by signing a 120-day note.
Issued a $40,000 note to Harris Motors for the purchase of a $40,000 deÂlivery truck. The note is due in 180 days and carries a 12% interest rate.
Purchased merchandise from Pans Enterprises in the amount of $15,000. Issued a 30-day, 12% note in settlement of the balance owed.
Issued a $60,000 note to Datatex Equipment in settlement of an overdue account payable of the same amount. The note is due in 30 days and carÂries a 14% interest rate.
The note to Pans Enterprises was paid in full.
10/31: The note to Datatex Equipment was paid in full.
11/30: Paid note to Bank of Kingville
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a. Prepare journal entries to record the transactions.
b. Prepare adjusting entries on October 31 to record accrued interest.
c. Prepare the Current Liability section of Red Bankâ€™s balance sheet as of October 31. Assume that the Accounts Payable account totals $203,600 on this date.