Described below are certain transactions of Larson Company for 2012: 1. On May 10, the company...

Described below are certain transactions of Larson Company for 2012:

1. On May 10, the company purchased goods from Fry Company for $75,000, terms 2/10, n/30. Purchases and accounts payable are recorded at net amounts. The invoice was paid on May 18.

2. On June 1, the company purchased equipment for $90,000 from Raney Company, paying $30,000 in cash and giving a one-year, 9% note for the balance.

3. On September 30, the company discounted at 10% its $200,000, one-year zero-interest-bearing note at First State Bank. Instructions

(a) Prepare the journal entries necessary to record the transactions above using appropriate dates.

(b) Prepare the adjusting entries necessary at December 31, 2012 in order to properly report interest expense related to the above transactions. Assume straight-line amortization of discounts.

(c) Indicate the manner in which the above transactions should be reflected in the Current Liabilities section of Larson Company's December 31, 2012 balance sheet.

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Described below are certain transactions of Lamar Company for 2018: 1. On May 10, the company...

Described below are certain transactions of Lamar Company for 2018: 1. On May 10, the company purchased goods from Fox Company for $71,500, terms 2/10, n/30. Purchases and accounts payable are recorded at net amounts. The invoice was paid on May 18. 2. On June 1, the company purchased equipment for $91,200 from Rao Company, paying $27,600 in cash and giving a one-year, 9% note for the balance. 3. On September 30, the company discounted at 10% its $190,000, one-year...

Described below are certain transactions of Pharoah Company for 2021: 1. On May 10, the company...

Described below are certain transactions of Pharoah Company for 2021: 1. On May 10, the company purchased goods from Fox Company for $74,900, terms 2/10, n/30. Purchases and accounts payable are recorded at net amounts. The invoice was paid on May 18. 2. On June 1, the company purchased equipment for $96,000 from Rao Company, paying $31,200 in cash and giving a one-year, 9% note for the balance. 3. On September 30, the company discounted at 11% its $220,000, one-year...

Described below are certain transactions of Tipper Transport Bhd for 2019 : 1. On 10 May,...

Described below are certain transactions of Tipper Transport Bhd for 2019 : 1. On 10 May, the company purchased goods from Tommy Auto Bhd for RM50,000, terms 2/10, n/30. Purchases and accounts payable are recorded at net amounts. The invoice was paid on 18 May. 2. On 1 June, the company purchased equipment for RM60,000 from Safety First Bhd, paying RM20,000 in cash and giving a one-year, 9% note for the balance. 3. On 30 September, the company borrowed RM108,000,...

Accounts and Notes Payable. Described below are certain transactions of Lamar Company for 2018: 1. On...

Accounts and Notes Payable. Described below are certain transactions of Lamar Company for 2018: 1. On May 10, the company purchased goods from Fox Company for $75,000, terms 2/10, n/30. Purchases and accounts payable are recorded at net amounts. The invoice was paid on May 18. 2. On June 1, the company purchased equipment for $150,000 from Rao Company, paying $50,000 in cash and giving a one-year, 9% note for the balance. 3. On September 30, the company discounted at...

Described below are certain transactions of Edwardson Corporation. The company uses the periodic inventory system. 1....

Described below are certain transactions of Edwardson Corporation. The company uses the periodic inventory system. 1. On February 2, the corporation purchased goods from Martin Company for $71,400 subject to cash discount terms of 2/10, n/30. Purchases and accounts payable are recorded by the corporation at net amounts after cash discounts. The invoice was paid on February 26. 2. On April 1, the corporation bought a truck for $76,000 from General Motors Company, paying $3,000 in cash and signing a...

Described below are certain transactions of Windsor Corporation. The company uses the periodic inventory system. 1....

Described below are certain transactions of Windsor Corporation. The company uses the periodic inventory system. 1. On February 2, the corporation purchased goods from Martin Company for $75,800 subject to cash discount terms of 2/10, n/30. Purchases and accounts payable are recorded by the corporation at net amounts after cash discounts. The invoice was paid on February 26. 2. On April 1, the corporation bought a truck for $50,000 from General Motors Company, paying $5,000 in cash and signing a...

Described below are certain transactions of Edwardson Corporation. The company uses the periodic inventory system. 1....

Described below are certain transactions of the Bell Company for 2020. Bell uses a perpetual inventory...

Described below are certain transactions of the Bell Company for 2020. Bell uses a perpetual inventory system. A. June 10, the company purchased the rights to natural resources on land owned by Jay Company for $60,000. Bell’s geology team believes they can successfully remove 600,000 pounds of ore from the mine. July 1, the company purchased a machine for $70,000 from Myers Company, paying $20,000 in cash and giving a two-year, 8% interest bearing note for the balance to Myers....

The below transactions concerns Ford Company for the year 2012: On May31st,2012, Ford company purchased a...

The below transactions concerns Ford Company for the year 2012: On May31st,2012, Ford company purchased a long-term investment related to Motro Companyfor $12 millionas trading securities, of 8% quoted bonds. On the same date the business acquired $15million of Cora Company shares as available-for sale security and purchased Treasury bonds for $3 million, from Samsuc Company hoping to generate profit in short period of time. On November 15th, 2012, Ford company sold the Samsuc Treasury bonds for $4 million. On...

Kinney’s Repair Ltd. was started on May 1. A summary of May transactions is presented below....

Kinney’s Repair Ltd. was started on May 1. A summary of May transactions is presented below. 1. Shareholders invested £15,572 cash in the business in exchange for ordinary shares. 2. Purchased equipment for £5,309 cash. 3. Paid £248 cash for May office rent. 4. Paid £370 cash for supplies. 5. Incurred £273 of advertising costs in the Beacon News on account. 6. Received £4,133 in cash from customers for repair service. 7. Declared and paid a £1,518 cash dividend. 8....

Subjects