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Wellington Company had the following transactions involving notes payable.
Nov. 1, 2010 Borrows $90,000 from Olathe State Bank by signing a 3-month, 10% note.
Dec. 31, 2010 Prepares the adjusting entry.
Feb. 1, 2011 Pays principal and interest to Olathe State Bank.
Instructions
Prepare journal entries for each of the transactions.
Beginning Inventory
The value of goods available for sale at the start of an accounting period, critical for calculating cost of goods sold (COGS) and ending inventory.
Understated
A term used to describe financial statements or figures that are reported to be less than the actual amounts.
Current Period
Refers to the specific duration of time (usually a fiscal quarter or year) currently under consideration or analysis.
Net Realizable Value
The projected sales price of products subtracted by the expense of selling or disposing of them.
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