3.Notes payable. Red Bank Enterprises was involved in the following transactions during the fiscal year ending October 31:2-Aug: Borrowed $55000 from the Bank of Kingsville by signing a 90-day 12% note.20-Aug: Issued a $50000 note to Harris Motors for the purchase of a $50000 delivery truck. The note is due in 180 days and carries a 12% interest r ate.10-Sep: Purchased merchandise from Pans Enterprises in the amount of $15000. Issueda 30-day 12% note in settlement of the balance owed.11-Sep: Issued a $60000 note to Datatex Equipment in settlement of an overdue accountpayable of the same amount. The note is due in 30 days and carries a 14% interest rate.10-Oct: The note to Pans Enterprises was paid in full.11-Oct: The note to Datatex Equipment was paid in full.30-Oct: Paid note to Bank of Kingsville.Instructionsa. Prepare journal entries to record the transactions.b. Prepare adjusting entries on December 31 to record accrued interest. (Daily interest is calculated utilizing the 360 day method).c. Prepare the Current Liability section of Red Bank s balance sheet as of December 31. Assume that the Accounts Payable account totals $203600 on this date.
