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Wexford Inc. is a retailer of office supplies and equipment. The following are transactions of the...

Wexford Inc. is a retailer of office supplies and equipment. The following are transactions of the company in January 2007.

Borrowed $10,000 from a local bank on January 15 and signed a 3-month note with 6% annual interest rate.

record any adjusting entries needed at the end of the accounting period (January 31, 2007). No explanation of the entries is required.

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Expert Solution

                                   Wexford Inc.
                             JOURNAL ENTRIES
For The Year Ended January 31,2007
Date                    Particular     LF      Debit      Credit
15-Jan Cash / Bank     A/C 10,000
        To Loan A/C 10,000
(Being, Loan receives fron local bank )
15-Jan Interest Expense A/C 150
       To Loan A/C 150
(Being, Interest received 6% annual interest rate ,
      at 3-month )
15-Jan Loan A/C 10150
      To Cash A/C 10150
( Being, Repayment of loan )
20,300 20,300
                    WORKING NOTE
Calculation Of Interest rate
Borrowed $10,000
Interest rate @6%
Month - 3
= Borrowed * Interest rate * Month / 12
=     10,000   *     6/100         *     3 / 12
=        $ 150

ekkarill92 answered 2 years ago
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