ACCT 2301 TDO16 (05/14/18-07T06/18) online/ Lesson 10/Chapter10 Graded Homework

Question

ACCT 2301 TDO16 (05/14/18-07T06/18) online/ Lesson 10/Chapter10 Graded Homework Problem 10-2A The following are selected transactions of Blanco Company. Blanco prepares financial statements quarterly Jan. Purchased merchandise on account from Nunez Company, $26,400, terms 2/10, n/30. (Blanco uses the perpetual inventory system.) Feb. 1 Issued a 9%,2-month. $26,400 note to Nunez in payment of account. Mar, 31 Accrued interest for 2 months on Nunez note Apr. 1 Paid face value and interest on Nunez note July , Purchased equipment from Marson Equipment paying $11,900 ash and signing a 10%, 3. month, $52,800 note Sept.30 Acorued interest for 3 months on Marson note. Oct. i Paid face value and interest on Marson note Borrowed $21,600 from the Paola Bank by issuing a 3-month, 8% note with a face value of L$21,600 Dec. 1 Dec. 31 Recognized interest expense for 1 month on Paola Bank note. Prepare journal entries for the listed transactions and events. (Credit account titles are automatically indented when amount is entered. Do not indent manualy. Record journal entries in the order presented in the problem) Account Titles and Explanation Date Debi Credit IC Apr. 1 Oct. 1

Explanation / Answer

Answer 1. Journal Entry Date Particulars Dr. Amt. Cr. Amt. 2-Jan Merchandise Inventory    26,400.00    Accounts Payable    26,400.00 (To record the merchandise inventory) 1-Feb Accounts Payble    26,400.00    Notes Payable    26,400.00 (To record the issue of Note) 31-Mar Interest Expense          396.00 $26,400 X 9% X 2/12    Interest Payable          396.00 (To record the interest expense) 1-Apr Notes Payable    26,400.00 Interest Payable          396.00    Cash    26,796.00 (To record the notes & interest paid) 1-Jul Equipment    64,700.00    Cash    11,900.00    Notes Payable    52,800.00 (To record the purchase of equipment) 30-Sep Interest Expense      1,320.00 $52,800 X 10% X 3/12    Interest Payable      1,320.00 (To record the interest expense) 1-Oct Notes Payable    52,800.00 Interest Payable      1,320.00    Cash    54,120.00 (To record the notes & interest paid) 1-Dec Cash    21,600.00    Notes Payable    21,600.00 (To record the amount borrowed from Paola Bank) 31-Dec Interest Expense          144.00 $21,600 X 8% X 1/12    Interest Payable          144.00 (To record the interest expense) Answer 2. Notes Payable Beg. Bal.                   -   1-Apr    26,400.00    26,400.00 1-Feb 1-Oct    52,800.00    52,800.00 1-Jul    21,600.00 1-Dec End. Bal.    21,600.00 Interest Payable Beg. Bal.                   -   1-Apr          396.00          396.00 31-Mar 1-Oct      1,320.00      1,320.00 30-Sep          144.00 31-Dec End. Bal.          144.00 Interest Expense Beg. Bal.                   -   31-Mar          396.00 30-Sep      1,320.00 31-Dec          144.00 End. Bal.      1,860.00 Answer 3. Bianco Company Balance Sheet (Partial) As on Dec-31 Liabilities Current Liabilities Notes Payable    21,600.00 Interest Payable          144.00 Total Current Liabilities    21,744.00 Answer 4. Total Interest Expense      1,860.00

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