Compute the total net liability to be reported on the

Question

The following areselected 2007 transactions of Sean Astin Corporation.

	Sept. 1	Purchased inventory fromEncino Company on account for $50,000. Astin records purchasesgross and uses a periodic inventory system.
	Oct. 1	Issued a $50,000,12-month, 8% note to Encino in payment of account.
	Oct. 1	Borrowed $50,000 from theShore Bank by signing a 12-month, zero-interest-bearing $54,000note.

Instructions:

(a) Prepare journal entries for the selectedtransactions above. (For multiple debit/credit entries,list in order of magnitude.)

(b) Prepare adjusting entries at December31.

1. the interest-bearing note.

2. the non-interest-bearing note.

(c) Compute the total net liability to be reported on the December 31 balance sheet for:

1. the interest-bearing note.
2. the non-interest-bearing note.