Exercise 18-23 aluminum to repurchase the Le spur Inc. enters i to an agreement

Question

Exercise 18-23 aluminum to repurchase the Le spur Inc. enters i to an agreement on March 1 2017, to Sell erner Metal Co pany al min m in ots. As part or the agreement, Lar so also agrees ingots on May 1, 2017, et the original sales price of $215,000 plus 3%, Prepare the journal entry necessary on March 1, 2017. (Credit account titles are automatieally indented when the amount is entered, Do not indent manualy, If no entry i "No entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation is required, select Prepare the journal entry for the repurchase of the ingots on May 1, 2017, (Credit account titles are automatically indented when the amount is entered. Do not indent manually, IF no entry is required, select "No entry" for the account titles and enter 0 for not indent Account Titles and Explanation

Explanation / Answer

Solution:

Journal Entries - Larkspur INC. Date Particulars Debit Credit 1-Mar-17 Cash Dr $215,000.00             To Advance from Werner Metal Company $215,000.00 (Being ingots sold with agreement of repurchase) 1-May-17 Interest Expense Dr ($215,000*3%) $6,450.00 Advance from Werner Metal Company Dr $215,000.00             To Cash $221,450.00 (Being ingots repurchased)

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