Question

	Make Journal Entries below for the following transactions WATCH THE DATES incl YEAR
1	On Feb 1, 2016 the company borrows $50,000 from the bank at 5% annual interest for 3 years.
2	Interest payments are due every 3 months. Make entry for May 1 , 2016 payment.
3	On Feb 1, 2019 the loan and the final interest are paid. Make the Journal.
4	March 1, Company sells products for a total of $250 and collects sales tax of 9%. Make Journal.
5	March 30, Company pays the sales tax collected in #4 to the state.
6	March 31, company pays payroll expense of $60,000. Deductions from the checks total the
	following:     Fed tax $$7,000, State tax $2,000, FICA $4500 and Kaiser health benefits $1200.
	Make the Journal
7	April 1 2016, Company sells 5,000 bonds, each at $1,000. Interest rate is 4% payable every April 1
	Bonds are for 5 years. Make the Journal.							.
8	April 1 2017 pay the interest. Make the Journal.
9	april 1 2021 pay the final interest and retire (pay off) the bonds.

Answer 1

No.	Date	Particulars	Debit	Credit
1	Feb-1-2016	Bank	50000
		Bank Loan 5%		50000
		Being Loan taken from bank for a period of 3year @ 5% annual interest
2	May-1-2016	Interest	625
		Bank	625
		Being payment of interest made
3	Dec-31-2018	Interest	417
		Interest payable		417
		Being interest due for Nov and Dec 50000* 5% * (1/12) * 2
	Feb-1-2019	Bank Loan 5%	50000
		Interest	208
		Interest payable	417
		Bank		50625
		Being repayment of loan with last 3 month interest
4	1-Mar	Bank/Debtors	272.5
		Sales Tax Payable @ 9%		22.5
		Sales		250
		Being sales made for $250 and the sales tax collcted @ 9%
5	30-Mar	Sales Tax Payable @ 9%	22.5
		Bank		22.5
		Being Sales tax paid to the state
6	31-Mar	Salary Expenses	60000
		Fed Tax		7000
		State tax		2000
		FICA		4500
		Kaiser health Benefit		1200
		Salary Payable (60000-7000-2000-4500-1200)		45300
		Being payroll for the month of march recorded
7	Apr-1-2016	Bank	5000000
		Bond Payable		5000000
		Being 5000 bond issued @ 1000 each @ 4% interest for 5 years
8	Dec-31-2016	Bond Interest expense	150000
		Bond Interest Payable		150000
		Being record of Accrued Interest for the period of Apr to dec 9month
	Apr-1-2017	Bond Interest expense	50000
		Bond Interest Payable	150000
		Bank		200000
		Being payment of one year bond interest
9	Dec-31-2020	Bond Interest expense	150000
		Bond Interest Payable		150000
		Being record of Accrued Interest for the period of Apr to dec 9month
	Apr-1-2021	Bond Payable	5000000
		Bond Interest expense	50000
		Bond Interest Payable	150000
		Bank		5200000
		Being record of final settlement with Interest

Notes

Here it is assumed as the financial year is ending on 31-December

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