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Total Net Liability Assignment | Top Universities

The following are selected 2020 transactions of Crane Corporation.

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Sept. 1 Purchased inventory from Encino Company on account for $37,600. Crane records purchase gross and use a periodic inventory system.
Oct. 1 Issued a $37,600, 12-month, 8% note to Encino in payment of the account.
Oct. 1 Borrowed $37,600 from the Shore Bank by signing a 12-month, zero-interest-bearing $41,680 note.

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Prepare journal entries for the selected transactions above. (If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record entries in the order displayed in the problem statement.)

Prepare to adjust entries at December 31. (If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,125.)

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

(1) The interest-bearing note $enter a dollar amount
(2) The zero-interest-bearing note $enter a dollar amount

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