Mastery Problem General Journal ds and Phil Bell own and operate The Second Hand
ID: 2557846 • Letter: M
Question
Mastery Problem General Journal ds and Phil Bell own and operate The Second Hand Equipment Shop. The t tollowing ransacions involving notes and interest were completed during he last hree months of 20- issued a S6,800, 60-day, 5% note to Mac Farm Equipment for purchase or merchan Received a S2000, 60-day, 6% note rorn R Chambersin payment tr sale of merchandise | b 15 Nov 1 Discounted the note received torn R Chambers on October 15 at Merchants Natonal Bank The discount rate is 7%. nteresteanng note tat was discounted at 6% 1 20 30 Borrowed $5,000 from First National Bank on a three-month, non- Received a $4,000, 90-day,65% note from L. Revsin in payment of an account receivable Issued a check to Mac Farm Equipment in payment ot the nate issued on October 1, including interest Dec. 10 i ssued a $3,000, 90day, 6% note to Remak Tractors to extend time for payment or an account payable Recerved nosticaton from Merchants Natonal Bank that R. Chamber the note plus a $20 bank fee that must be paid to the bank s has dishonored his note. A check is issuedzo cover e bank Required 1. Prepare general journal enries for te transacions. 2 Prepare necessary adjusang entries for the notes outstanding on Ded Check My Work 1 more Check My Work uses remaining Next save and Exit Submit Assignment for GradingExplanation / Answer
Journal Entries: Date Accounts Titles Debit $ Credit $ 1-Oct Merchandise 6800 Note payable 6800 (being issue of note on purchase of merchandise) 15-Oct Note receivable 2000 Sales revenue 2000 (being note received against the sales made) 1-Nov Cash 1860 cash discount 140 Note receivable 2000 (being getting note receivable discounting from bank) 1-Nov cash 4700 discount on note issued 300 Note payable 5000 (Being borrowed from bank on signing non-interest bearing note) 20-Nov Note receivable 4000 Sales revenue 4000 (note received for sales made) 30-Nov Note payable 6800 Interest expense 57 Cash 6857 (being payment of note payable with interest) 10-Dec Accounts payable 3000 Note Payable 3000 (being note issued against accounts payable) 16-Dec Accounests Receivable 2020 bank Charges 20 Cash 2020 Interest Revenue 20 (being note receivable discounted got dishonoured by R.Chambers) adjusting Journal Entries: 31-Dec Interest expense 10 Interest payable 10 31-Dec Interest receivable 29 Interest revenue 29