1.Alpha Company prepares quarterly adjusting entries. On November 1, 2017, Alpha
ID: 2561996 • Letter: 1
Question
1.Alpha Company prepares quarterly adjusting entries. On November 1, 2017, Alpha Company purchased equipment with a sticker price of $8,515 and signed a note due in 9 months for $10,000 that included interest in the value of the note. Use this information to prepare a general journal entry for the November 1 equipment purchase. Prepare any additional general journal adjusting entries for Fiscal Years 2017 & 2018. Additionally, prepare the general journal entry to record the payment of the note when due in 2018.
General Journal
Date
Accounts
Debit
Credit
8/31/17
9/30/17
12/31/17
3/31/18
5/31/18
Date
Accounts
Debit
Credit
8/31/17
9/30/17
12/31/17
3/31/18
5/31/18
Explanation / Answer
Solution:
Journal Entries
Date
Accounts
Debit
Credit
Nov.1, 2017
Equipment
$8,515
Discount on Notes Payable
$1,485
Notes Payable
$10,000
(Equipments purchased and signed a Notes Payable on discount)
Dec.31, 2017
Interest Expenses
$330
Discount on Notes Payable
$330
(2 months interest expenses recorded 1485/9*2)
March.31, 2018
Interest Expenses
$495
Discount on Notes Payable
$495
(3 months interest expenses recorded 1485/9*3)
June.30, 2018
Interest Expenses
$495
Discount on Notes Payable
$495
(3 months interest expenses recorded 1485/9*3)
Aug.1, 2018
Notes Payable
$10,000
Interest Expenses
$165
Cash
$10,000
Discount on Notes Payable (1485/9*1)
$165
(Notes payable paid and 1 month interest expenses recorded)
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Date
Accounts
Debit
Credit
Nov.1, 2017
Equipment
$8,515
Discount on Notes Payable
$1,485
Notes Payable
$10,000
(Equipments purchased and signed a Notes Payable on discount)
Dec.31, 2017
Interest Expenses
$330
Discount on Notes Payable
$330
(2 months interest expenses recorded 1485/9*2)
March.31, 2018
Interest Expenses
$495
Discount on Notes Payable
$495
(3 months interest expenses recorded 1485/9*3)
June.30, 2018
Interest Expenses
$495
Discount on Notes Payable
$495
(3 months interest expenses recorded 1485/9*3)
Aug.1, 2018
Notes Payable
$10,000
Interest Expenses
$165
Cash
$10,000
Discount on Notes Payable (1485/9*1)
$165
(Notes payable paid and 1 month interest expenses recorded)
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