Tony’s favorite memories of his childhood were the times hespent with his dad at camp. Tony was daydreaming of those days abit as he and Suzie jogged along a nature trail and came across awonderful piece of property for sale. He turned to Suzie and said,“I’ve always wanted to start a camp where families could get awayand spend some quality time together. If we just had the money, Iknow this would be the perfect place.” On November 1, 2022, GreatAdventures purchased the land by issuing a $600,000, 6%, 10-yearinstallment note to the seller. Payments of $6,661 are required atthe end of each month over the life of the 10-year loan. Eachmonthly payment of $6,661 includes both interest expense andprincipal payments (i.e., reduction of the loan amount).
Late that night Tony exclaimed, “We now have land for our new camp;this has to be the best news ever!” Suzie said, “There’s somethingelse I need to tell you. I’m expecting!” They decided right then,if it was a boy, they would name him Venture.
- Record the issuance of the long-term note payable for thepurchase of land on November 1, 2022.
- Record the first monthly payment on the long-term note payable,made on November 30, 2022.
- Record the second monthly payment on the long-term notepayable, made on December 31, 2022.
- The 12 monthly payments in 2023 (following year) will reducethe note's balance by an additional $45,616. Record thereclassification of this amount from long-term notes payable tocurrent notes payable.
- Prepare the closing entry for revenue accounts.
- Prepare the closing entry for expense and loss accounts.
Prepare general journal, income statement (unadjusted), andbalance sheet.
