In: Accounting
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. |
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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