Question

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 one-year, 10% note for the balance of the purchase price.
3.		On May 1, the corporation borrowed $86,600 from Chicago National Bank by signing a $96,200 zero-interest-bearing note due one year from May 1.
4.		On August 1, the board of directors declared a $324,900 cash dividend that was payable on September 10 to stockholders of record on August 31.

A) Make all the journal entries necessary to record the transactions above using appropriate dates. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

Date	Account Titles and Explanation	Debit	Credit
choose a transaction date: February 2/February 26/April 1/May 1/August 1/September 10.	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date: February 2/February 26/April 1/May 1/August 1/September 10	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date: February 2/February 26/April 1/May 1/August 1/September 10	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date: February 2/February 26/April 1/May 1/August 1/September 10	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date: February 2February 26April 1May 1August 1September 10	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date: February 2February 26April 1May 1August 1September 10	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount

B) Windsor Corporation’s year-end is December 31. Assuming that no adjusting entries relative to the transactions above have been recorded, prepare any adjusting journal entries concerning interest that are necessary to present fair financial statements at December 31. Assume straight-line amortization of discounts. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

No.	Account Titles and Explanation	Debit	Credit
1.	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
2.	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
3.	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
4.	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount

PLEASE PROVIDE STEPS AND EXPLANATION WITH ANSWERS. THANK YOU!

Answer 1

Journal entries:

Date	Account Titles and Explanation	Debit	Credit
Feb-02	Purchases ($75,800 x 98%)	74,284
	Accounts payable		74,284
	(To record purchases on account net of discount)
Feb-26	Accounts payable	74,284
	Purchase discount lost	1,516
	Cash		75,800
	(To record payment on account after discount period)
Apr-01	Truck	50,000
	Cash		5,000
	Notes payable		45,000
	(To record purchase of truck)
May-01	Cash	86,800
	Discount on notes payable	9,400
	Notes payable		96,200
	(To record borrowing against zero-interest-bearing note)
Aug-01	Dividend	324,900
	Dividend Payable		324,900
	(To record cash dividends declared)
Sep-10	Dividend Payable	324,900
	Cash		324,900
	(To record payment of cash dividends)

Adjusting entries:

No.	Account Titles and Explanation	Debit	Credit
1	No Entry	0
	No Entry		0
2	Interest expense ($45,000 x 10% x 9/12)	3,375
	Interest payable		3,375
	(To record interest accrued on note payable)
3	Interest expense ($9,400 x 8/12)	6,267
	Discount on notes payable		6,267
	(To record amortization of discount on note payable)
4	No Entry	0
	No Entry		0

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