ASSIGNMENT RESOURCES Post-Class Chpt 10A Problem 10-2A (Pa Problem 10-2A (Part L

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ASSIGNMENT RESOURCES Post-Class Chpt 10A Problem 10-2A (Pa Problem 10-2A (Part Level Submission) Blue Corporation sells rock-climbing products and also operates an indoor climbing facility for climbing enthusiasts. During the last part of 2017, Blue had the following transactions related to notes payable Sept. Issued a $14,400 note to Pippen to purchase inventory. The 3-month note payable bears interest of 7% and is due December 1. (Blue uses a perpetual inventory system.) Recorded accrued interest for the Pippen note issued a $20,400, 10%, 4-month note to Prime Bank to finance the purchase of a new climbing wall for advanced climbers. The note is due February 1. Recorded accrued interest for the Pippen note and the Prime Bank note. Issued a $26,400 note and paid $8,600 cash to purchase a vehicle to transport clients to nearby climbing sites as part of a new series of climbing classes. This note bears Problem-10-8A (Part 30 Oct. 1 Review Results by Study Objective 31 Nov. 1 interest of 6% and matures in 12 months. Recorded accrued interest for the Pippen note, the Prime Bank note, and the vehicle note Paid principal and interest on the Pippen note Recorded accrued interest for the Prime Bank note and the vehicle note 30 Dec. 1 Dec 31 Prepare journal entries for the transactions noted above. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit Sept. 1Inventory 14,400 Notes Payable Interest Expense Interest Payable 14,400 Sept. 30

Explanation / Answer

SOLUTION

(A)

Date Account titles and Explanation Debit ($) Credit ($) Sept.1 Merchandise Inventory 14,400 Notes Payable 14,400 Sept.30 Interest Expense ($14,400 * 7% * 1/12) 84 Interest Payable 84 Oct.1 Equipment 20,400 Notes payable 20,400 Oct.31 Interest Expense [($20,400 * 10% * 1/12) + $84] 254 Interest Payable 254 Nov.1 Equipment 35,000 Notes Payable 26,400 Cash 8,600 Nov.30 Interest Expense [($26,400*6%*1/12) + $254] 386 Interest Payable 386 Dec.1 Notes Payable 14,400 Interest Payable ($84*3) 252 Cash 14,652 Dec.31 Interest Expense [($20,400*10%*1/12)+ ($26,400*6%*1/12)] 302 Interest Payable 302

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