At the end of 2022, the following information is available for Great Adventures. 1. Additional interest for five months needs to be accrued on the $34,000, 6% loan obtained on August 1, 2021. Recall that annual interest is paid each July 31.
2. Assume that $14,000 of the $34,000 loan discussed above is due next year.
3. By the end of the year, $20,000 in gift cards have been redeemed. The company had sold gift cards of $29,000 during the year and recorded those as Deferred Revenue.
4. 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 $16,000.
5. 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 $8,000.