Reference no: EM132997282

Question - At the end of 2022, the following information is available for Great Adventures.

Additional interest for five months needs to be accrued on the $30,000, 6% loan obtained on August 1, 2021. Recall that annual interest is paid each July 31.

Assume that $10,000 of the $30,000 loan discussed above is due next year.

By the end of the year, $20,000 in gift cards have been redeemed. The company had sold gift cards of $25,000 during the year and recorded those as Deferred Revenue.

Great Adventures is a defendant in litigation involving a biking accident during one of its adventure races. The company believes the likelihood of payment occurring is probable, and the estimated amount to be paid is $12,000.

For sales of MU watches, Great Adventures offers a warranty against defect for one year. At the end of the year, the company estimates future warranty costs to be $4,000.

Required -

1. Record the accrued interest on note.

2. Record the reclassified portion of long-term debt as current.

3. Record the redeemed of gift cards.

4. Record the loss of contingent liability.

5. Record the estimated future warranty costs.

6. Record entry to close the revenue accounts.

7. Record entry to close the expense accounts.