Question

1- a restaurant made cash sales of $4,000 subject to a 5% sales tax. record the sales and the related tax. also record the payment of the tax to the state.

on october 1, 2014, rhodes company purchased equipment at a cost of $10,000.00, signing a nine-month 8% note payable for that amount. record the october 1 purchase and the adjusting entry needed on december 31, 2014. record the entry for the payment of the note plus interest at maturity on july 1, 2015.

2- closing entries using T-account

title	debit	credit
cash
sales revenue
sales tax payable
sales tax payable
cash
equipment
notes payable
interest expense
interest payable
note payable
interest payable
interest expense
cash

please do 1 and 2

Answer 1

Answer. 1
Date	Tittle	Debit	Credit
	Cash	$     4,200
	Sales Revenue		$     4,000
	Sales Tax Payable		$       200
	To record cash sales
	Sales Tax Payable	$       200
	Cash		$       200
	To record payment of sales tax payable
10/1/2014	Equipment	$   10,000
	Notes Payable		$   10,000
	To record purchase of equipment
12/31/2014	Interest Expense	$       200
	Interest Payable		$       200
	To record accrued interest for 3 months
7/1/2015	Notes Payable	$   10,000
	Interest Payable	$       200
	Interest Expense	$       400
	Cash		$   10,600
	To record payment of N.P, I.P & Int. Exp.

Note. Closing entries are required for revenue and expense and it is assumed that it is required on 1 July, 2015.

If closing entry is required on Dec.31, 2014, then amount of interest expense to the extent of $200 will be closed in stead of $600.

Answer 2. Closing Entry using T- account
Sales Revenue
	Dr.	Cr.
		$ 4,000	Income summary
Interest Expense
Income summary	$    600
Income summary
Interest expense	$    600	$ 4,000	Sales Revenue