Question

Problem 10-2A (Part Level Submission) Bridgeport Corporation sells rock-climbing products and also operates an indoor climbing facility for climbing enthusiasts. During the last part of 2017, Bridgeport had the following transactions related to notes payable. Sept. 1 Issued a $14,400 note to Pippen to purchase inventory. The 3-month note payable bears interest of 6% and is due December 1. (Bridgeport uses a perpetual inventory system.) Sept. 30 Recorded accrued interest for the Pippen note. Oct. 1 Issued a $20,400, 10%, 4-month note to Prime Bank to finance the purchase of a new climbing wall for advanced climbers. The note is due February 1. Oct. 31 Recorded accrued interest for the Pippen note and the Prime Bank note. Nov. 1 Issued a $25,200 note and paid $8,900 cash to purchase a vehicle to transport clients to nearby climbing sites as part of a new series of climbing classes. This note bears interest of 6% and matures in 12 months. Nov. 30 Recorded accrued interest for the Pippen note, the Prime Bank note, and the vehicle note. Dec. 1 Paid principal and interest on the Pippen note. Dec. 31 Recorded accrued interest for the Prime Bank note and the vehicle note.

Prepare journal entries for the transactions noted above. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

Post the above entries to the Notes Payable, Interest Payable, and Interest Expense accounts. (Post entries in the order of journal entries posted in the previous part of the question.)

Answer 1

Journal entries					T- Accounts
						Notes payable
date	explanation	debit	credit		1-Dec	notes payable-Pippen	14400	1-Sep	Inventory	14400
1-Sep	Inventory	14400			31-Dec	balance	45600	1-Oct	cash	20400
	notes payable-Pippen		14400					1-Nov	vehicle	25200
					total		60000	total		60000
30-Sep	interest expense	72
	interest payable		72			interest expense
					30-Sep	interest payable	72	1-Dec	cash	216
1-Oct	cash	20400			31-Oct	interest payable	242	31-Dec	balance	762
	notes payable- prime bank		20400		30-Nov	interest payable	368
					31-Dec	interest payable	296
31-Oct	interest expense	242
	interest payable		242		total		978	total		978
1-Nov	vehicle	34100				interest Payable
	cash		8900		1-Dec	cash	296	30-Sep	interest expense	72
	notes payable		25200		31-Dec	cash	682	31-Oct	interest expense	242
								30-Nov	interest expense	368
30-Nov	interest expense	368						31-Dec	interest expense	296
	interest payable		368
					total		978	total		978
1-Dec	notes payable-Pippen	14400
	interest payable	216
	cash		14616
31-Dec	interest expense	296
	interest payable		296