Question

3.   On January 1, issued 10-year, 10%, $100,000 bonds at 97. Annual interest payments are due December 31 of each year.
4.   On December 31, sells merchandise ($100,000 cost) to customers for $200,000 cash in a state where the state sales tax rate is 5%.
5.   On December 31, make first $8,042 payment made on $20,000 note issued to First National Bank in Event 2. Hint: remember to allocate the $8,042 payment between principal reduction and 10% interest payment. (amortization schedule to help determine the interest and principal repayment amounts—amortization schedule NOT required in Excel)
6.   On December 31, make first annual interest payment and bond amortization on 10-year, 10%, $100,000 bonds issued at 97 in event 3.

Please help me create a general ledger for these events!!! Thank you so much. I will give a good rating :)

Answer 1

S.No.	Date	Account Titles	Debit $	Credit $
3	January .1	Cash (100,000 x 97% )	97,000
		Discount on Bond	3,000
		10% Bond Payable		1,00,000
4	December .31	Cash	210,000
		Sales Revenue		200,000
		Sales Tax payable		10,000
		(200,000 x 5% )
	December .31	Cost of Goods Sold	1,00,000
		Inventory		1,00,000
		(Under perpetual inventory system )
5	December .31	Note Payable-First national bank	6,042
		Interest Expense ( 20,000 x 10% )	2,000
		Cash		8,042
6	December .31	Interest Expense	10,300
		Cash ( 100,000 x 10% )		10,000
		Discount on Bond ( 3,000 / 10 )		300