In: Accounting
The January 1, Year 1 trial balance for the Wright Company is
found on the trial...
The January 1, Year 1 trial balance for the Wright Company is
found on the trial balance tab. The beginning balances are
assumed.
Clark Co. entered into the following transactions involving
short-term liabilities. (Use 360 days a
year.)
Year 1 |
|
|
|
|
Apr. |
|
20 |
|
Purchased $49,250 of merchandise on credit from Walsh, terms
n/30. |
May |
|
19 |
|
Replaced the April 20 account payable to Walsh with a 90-day,
14%, $37,000 note payable along with paying $12,250 in cash. |
July |
|
8 |
|
Borrowed $99,000 cash from NJR Bank by signing a 120-day, 9%,
$99,000 note payable. |
Aug. |
|
17 |
|
Paid the amount due on the note to Walsh at the maturity
date. |
Nov. |
|
5 |
|
Paid the amount due on the note to NJR Bank at the maturity
date. |
Nov. |
|
28 |
|
Borrowed $57,000 cash from Fargo Bank by signing a 60-day, 8%,
$57,000 note payable. |
Dec. |
|
31 |
|
Recorded an adjusting entry for accrued interest on the note to
Fargo Bank. |
|
|
|
|
|
Year 2 |
|
|
|
|
Jan. |
|
27 |
|
Paid the amount due on the note to Fargo Bank at the maturity
date. |
General Journal tab - Prepare the Year
1 journal entries related to the notes and accounts payable of
Clark Co.
Calculation of interest tab - Use the
interest formula (P x R x T) to verify the amount of interest
recorded in your entries. Verify that total interest expense agrees
with the trial balance.
Year 2 payment tab - Prepare the January
27, Year 2 entry to record the repayment of the note at
maturity.
- Apr. 20. Purchased $49,250 of merchandise on credit from Walsh,
terms n∕30. Clark uses the perpetual inventory system.
Note: Enter debits before credits.
|
|
Date |
Account Title |
Debit |
Credit |
Apr 20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Apr. 20. Purchased $49,250 of merchandise on credit from Walsh,
terms n∕30. Clark uses the perpetual inventory system.
Note: Enter debits before credits.
|
|
Date |
Account Title |
Debit |
Credit |
Apr 20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Jul. 8. Borrowed $99,000 cash from NJR Bank by signing a
120-day, 9% interest-bearing note with a face value of
$99,000.
Note: Enter debits before credits.
|
|
Date |
Account Title |
Debit |
Credit |
Jul 08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Jul. 8. Borrowed $99,000 cash from NJR Bank by signing a
120-day, 9% interest-bearing note with a face value of
$99,000.
Note: Enter debits before credits.
|
|
Date |
Account Title |
Debit |
Credit |
Jul 08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Jul. 8. Borrowed $99,000 cash from NJR Bank by signing a
120-day, 9% interest-bearing note with a face value of
$99,000.
Note: Enter debits before credits.
|
|
Date |
Account Title |
Debit |
Credit |
Jul 08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Nov. 28. Borrowed $57,000 cash from Fargo Bank by signing a
60-day, 8% interest-bearing note with a face value of $57,000.
Note: Enter debits before credits.
|
|
Date |
Account Title |
Debit |
Credit |
Nov 28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Dec. 31 Recorded an adjusting entry for accrued interest on the
note to Fargo Bank.
Note: Enter debits before credits.
|
|
Date |
Account Title |
Debit |
Credit |
Dec 31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|