Problem 10-2A The following are selected transactions of Blanco Company. Blanco

Question

Problem 10-2A The following are selected transactions of Blanco Company. Blanco prepares financial statements quarterly. Jan. 2 Purchased merchandise on account from Nunez Company, $19,200, terms 2/10, n/30. (Blanco uses the perpetual inventory system.) Feb. 1 Issued a 9%, 2-month, $19,200 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 $12,900 n cash and sigingai0%,3 month, ssieoo note Sept. 30 Accrued interest for 3 months on Marson note. Oct. 1 Paid face value and interest on Marson note. Dec. 1 Borrowed $32,400 from the Paola Bank by issung a 3-month, 8% note with a face value of$32.400. 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 Date Account Titles and Explanation Debit Credit Apr. 1 Oct. 1 SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT

Explanation / Answer

Date Accounts Title Dr Cr Jan-02 Mercabdise Inventory $19200 Accounts payable $19200 Feb-01 Accounts payable $19200 Notes payable $19200 Mar-31 Interest expenses 288 Interest payable (19200*9%*2/12) 288 Apr-01 Notes payable 19200 Interest payable (19200*9%*2/12) 288 Cash 19488 Jul-01 Equipment 64500 Notes payable 51600 Cash 12900 Sep-30 Interest expenses 1290 Interest payable (51600*10%*3/12)) 1290 Oct-01 Notes payable 51600 Interest payable (51600*10%*3/12)) 1290 Cash 52890 Dec-01 Cash 32400 Notes payable 32400 Dec-31 Interest expenses 216 Interest payable 216 Notes payable Apr-01 19200 Feb-01 19200 Sep-30 51600 Jul-01 51600 Dec-01 32400 End bal 32400 Interest payable Mar-31 288 Mar-31 288 Sep-30 1290 Sep-30 1290 Dec-31 216 end bal 216 Interest expenses Mar-31 288 Sep-30 1290 Dec-31 216 end bal 1794 Balance Sheet Current Liabilities Notes Payable 32400 Interest payable 216 Total Current Liabilities 32616 Interest expenses 1794

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