On August 1, 2018 Barkley Corporation purchased equipment for $90,000 from RCH Company, paying $18,000...

On August 1, 2018 Barkley Corporation purchased equipment for $90,000 from RCH Company, paying $18,000 in cash and signing a 9% note for the balance. Interest and the note balance are due in full on July 31, 2019.
On September 30, 2018, Barkley Corporation borrowed $275,862 from Fast Eddie’s Financing. Barkley signed a promise to pay contract -- agreeing to pay $300,000 at the end of 12 months on July 31, 2019.

Barkley Corporation has a year end of December 31^st.

Required:

a. For each situation above, prepare journal entries for 2018, including necessary adjusting entries at year end 2018 for both situations.

b. Next, prepare the journal entries necessary in 2019 for both situations above.

Expert Solution

ekkarill92 answered 1 year ago

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