The following items were selected from among the transactions completed by Sherw
ID: 2583732 • Letter: T
Question
The following items were selected from among the transactions completed by Sherwood Co. during the current year:
Chart of Accounts
Journal
1. Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year. Scroll down to access page 12 of the journal. Round your answers to the nearest dollar.
PAGE 11
JOURNAL
ACCOUNTING EQUATION
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
PAGE 12
JOURNAL
ACCOUNTING EQUATION
1
Adjusting Entries
2
3
4
5
Mar. 1 Purchased merchandise on account from Kirkwood Co., $366,000, terms n/30. 31 Issued a 30-day, 6% note for $366,000 to Kirkwood Co., on account. Apr. 30 Paid Kirkwood Co. the amount owed on the note of March 31. Jun. 1 Borrowed $198,000 from Triple Creek Bank, issuing a 45-day, 8% note. Jul. 1 Purchased tools by issuing a $270,000, 60-day note to Poulin Co., which discounted the note at the rate of 6%. 16 Paid Triple Creek Bank the interest due on the note of June 1 and renewed the loan by issuing a new 30-day, 6.5% note for $198,000. (Journalize both the debit and credit to the notes payable account.) Aug. 15 Paid Triple Creek Bank the amount due on the note of July 16. 30 Paid Poulin Co. the amount due on the note of July 1. Dec. 1 Purchased equipment from Greenwood Co. for $400,000, paying $108,000 cash and issuing a series of ten 8% notes for $29,200 each, coming due at 30-day intervals. 22 Settled a product liability lawsuit with a customer for $320,000, payable in January. Accrued the loss in a litigation claims payable account. 31 Paid the amount due to Greenwood Co. on the first note in the series issued on December 1.Explanation / Answer
SOLUTION
(A)
(B)
Date Accounts title and Explanations Debit ($) Credit ($) Mar.1 Inventory 366,000 Accounts Payable-Kirkwood Co. 366,000 Mar.31 Accounts Payable-Kirkwood Co. 366,000 Notes Payable 366,000 Apr.30 Notes Payable 366,000 Interest Expense ($366,000*30/360*6%) 1,830 Cash 367,830 June 1 Cash 198,000 Notes Payable 198,000 July 1 Tools 267,300 Interest Expense ($270,000*60/360*6%) 2,700 Notes Payable 270,000 July 16 Notes Payable 198,000 Interest Expense ($198,000*30/360*8%) 1,320 Notes Payable 198,000 Cash 1,320 Aug.15 Notes Payable 198,000 Interest Expense ($198,000*30/360*6.5%) 1,073 Cash 199,073 Aug.30 Notes Payable 270,000 Cash 270,000 Dec.1 Office Equipment 400,000 Notes Payable 292,000 Cash 108,000 Dec22 Litigation Loss 320,000 Litigation Claims Payable 320,000 Dec.31 Notes payable 29,200 Interest Expense ($29,200*30/360*8%) 195 Cash 29,395Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.