Question

3.On October 1, 2018, Pastina signed a $57,000 note that requires interest to paid annually on September 30 at 12% and will have principal due in 10 years.

Note: Enter debits before credits.

4.On March 1, 2018, the company lent $27,000. The note required principal and interest at 8% be paid on February 28, 2019.

	Transaction General Journal Debit Credit 3 Interest expense ? Interest payable ? 4 interest receivable ? interest revenue ?

5.On April 1, 2018, the company paid $6,840 for a two-year fire insurance policy and debited the entire amount to insurance expense.

Note: Enter debits before credits.

	Transaction General Journal Debit Credit 5 Prepaid insurance ? Insurance expense ?

6.Supplies on hand at December 31, 2018 were $700.

Note: Enter debits before credits.

	Transaction General Journal Debit Credit 6 Supplies expense ? Supplies ?

Answer 1

Transaction	General Journal	Debit	Credit
3	Interest expense	$1,710.00
	Interest payable		$1,710.00
	(Interest Expenses Booked for the Year end)
4	interest receivable	$1,800.00
	interest revenue		$1,800.00
	(Interest Receivable on Notes Receivable)
5	Prepaid insurance	$4,275.00
	Insurance expense		$4,275.00
	(Being 3 Months Insurance Not expired Yet and recorded as Asset)
6	Supplies expense	$   300.00
	Supplies		$   300.00
	(Amount of supplies consumed booked as expenses)
Note* The Amount of Supplies purchased +Opening are assumed to be $1000.