(a) Date Account Titles and Explanation Debit Credit Jan. 2 Feb. 1 Mar. 31 Apr.
ID: 2496939 • Letter: #
Question
(a)
Date
Account Titles and Explanation
Debit
Credit
Jan. 2
Feb. 1
Mar. 31
Apr. 1
July 1
Sept. 30
Oct. 1
Dec. 1
Dec. 31
The following are selected transactions of Blanco Company. Blanco prepares financial statements quarterly.Jan. 2 Purchased merchandise on account from Nunez Company, $22,800, terms 3/10, n/30. (Blanco uses the perpetual inventory system.) Feb. 1 Issued a 9%, 2-month, $22,800 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 1 Purchased equipment from Marson Equipment paying $12,910 in cash and signing a 10%, 3-month, $62,400 note. Sept. 30 Accrued interest for 3 months on Marson note. Oct. 1 Paid face value and interest on Marson note. Dec. 1 Borrowed $34,800 from the Paola Bank by issuing a 3-month, 8% note with a face value of $34,800. Dec. 31 Recognized interest expense for 1 month on Paola Bank note.
Explanation / Answer
Date Debit Credit
Jan 2
Purchase Merchandise A/c $22,800
Nunez Company $22,800
Feb 1
Nunez Company $22,800
9% Note payable $22,800
31 March
Interest $342
Interest Payable $342 ( $22800 X 9% X 2/12)
1st April
Interest payale $342
9 % Note Payable $22,800
Cash $ 23,142
July 1
Equipment $ 75,310
cash $12,910
10% Note payable $62,400
Sept 30
Interest $1560
Interest payable $1560 (62,400X 10% X 3/12)
1st oct
Interest payable $1560
10% Note payable $62,400
Cash $63,960
Dec 1st
Cash $34,800
8% Pola bank Note payable $34,800
Dec 31
Interest $232
Interest Payable $232 ( 34,800 X 8% X 1/12)
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