Week 1 Date Transaction description 1 Obtained a loan of $50,000 from BitiBank a

Question

Week 1

Date Transaction description

1 Obtained a loan of $50,000 from BitiBank at a simple interest rate of 6% per year. The first interest payment is due at the end of August 2016 and the principal of the loan is to be repaid on 1 June 2020.

5 Paid the full amount owing to Buena Vista Coffee, Cheque No. 903. Payment fell within discount period.

5 Paid the full amount owing to East Tangiers Co-op., Cheque No. 904. Payment fell within discount period.

5 Made cash sales of $8,022 during the first 5 days of the month.

6 Purchased 7 bags of Light Roast Arabica Coffee Beans from Abejundio Coffee for $281 each, terms 2/10, n/30.

6 Sold 4 bags of Light Roast Arabica Coffee Beans to Con's Coffee for $394 each, Invoice No. 501.

6 Purchased General Cafe Supplies with cash for $520, Cheque No. 905. 7 Purchased 4 boxes of Plastic Plates from Jordo Gourmet Coffee for $120 each, terms net 30.

Record all week 1 transactions in the relevant journals.

Note that special journals must be used where applicable. Any transaction that cannot be recorded in a special journal should be recorded in the general journal.

Explanation / Answer

1)
Cash (dB) 50,000
debt (cr) 50,000

5) No info given regarding this transaction

5)No info given regarding this transaction

5)cash (db) 8022
revenue (cr) 8022

6)inventory (db) 281*7=1967
acc payable (cr) 1967

6) cash (db) 394*4 =$1576
revenue (cr) 1576

inventory (cr) 4*281=1124
cost of goods sold (db) 1124

6)cash (cr) 520
supplies (db) 520

7)cash (cr) 4*120=$480
inventory (db) 480

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