The company purchases a $9,000 short term interest-bearing investment-Notes Rece
ID: 2559552 • Letter: T
Question
The company purchases a $9,000 short term interest-bearing investment-Notes Receivable (3 month,5%) Chapter 7 March 1 Sold a Mac for $2,000. This asset was included in the February 5 equipment purchase and had an original purchase price of $3,000, but once in use, the owners quickly realized, it was not adequate for their needs. (Hint: remember one month of depreciation was recorded in February; remember this as you determine the gain or loss.) Chapter 8 1 March 2 Purchased PCs for $5,000. Chapter 8 March 2 Issue 5-year, 9% bonds payable with a face value of $10,000. The bonds were issued at 104 and pay interest March 5 Paid salaries and wages payable ($2,300) and utilities ($500- recorded as accounts payable) and the on June 30 and December 31. Chapter 10 remaining accounts payable balance ($200) from purchasing supplies. See opening balances for wages payable above. March 6 Based on a customer survey, the company decided to sell motivational/self-help books and resources and purchased $7,500 of merchandise on account, with terms 2% 10, net 30, Freight costs were $100, this amount is included in the $7,500, but the discount terms do not apply to freight. If the company elects to pay within the discount period, they will reduce the inventory account by the discounted amount. Chapter 4 March 10 The company returns $500 of the merchandise. Chapter March 15 The company pays the vendor for the merchandise purchased on March 6. Chapter 4 March 15 Paid $3, 1xx salaries and wages March 17 Purchases supplies on account for $2 March 20 Issued 1,000 shares of $1 par value stock for $6,000. Chapter 11Explanation / Answer
5% Notes Receivable A/c. Dr
To Bank A/c
9000
9000
Bank A/c. Dr
P& L A/c. Dr
To Mac. A/c
2000
1000
3000
PC A/c. Dr
To Bank A/c
5000
Bank A/c. Dr
To 9% Bonds A/c
To Interest A/c
104000
103850
150
Purchase A/c. Dr
Freight A/c. Dr
To Creditor
7500
100
7600
Creditor A/c. Dr
To Purchase return
500
Creditor A/c. Dr
To Cash A/c
To Discount red.
7000
6860
140
Salary & Wages A/c. Dr
To Cash A/c
3100
Purchase A/c. Dr
To Creditor A/c
2111
Cash A/c. Dr
To equity share capital A/c
To security premium reserve A/c
6000
1000
5000
security premium reserve A/c. Dr
To bank A/c
1900
1900
Cash A/c. Dr
To revenue A/c
12111
Debtor A/c. Dr
To revenue A/c
5211
Cash A/c. Dr
To Debtor A/c
4100
Cash A/c. Dr
Debtor A/c. Dr
To Sales A/c
To Sales tax collected A/c
5280
3520
8000
800
Creditor A/c. Dr
To cash A/c
800
Advertising A/c. Dr
Rent A/c. Dr
To cash a/c
3811
2211
6022
Date Particular Amount Debited Amount Credited 1 Mar5% Notes Receivable A/c. Dr
To Bank A/c
9000
9000
1 MarBank A/c. Dr
P& L A/c. Dr
To Mac. A/c
2000
1000
3000
2 MarPC A/c. Dr
To Bank A/c
5000
5000 2 MarBank A/c. Dr
To 9% Bonds A/c
To Interest A/c
104000
103850
150
6 MarPurchase A/c. Dr
Freight A/c. Dr
To Creditor
7500
100
7600
10 MarCreditor A/c. Dr
To Purchase return
500
500 15 MarCreditor A/c. Dr
To Cash A/c
To Discount red.
7000
6860
140
15 MarSalary & Wages A/c. Dr
To Cash A/c
3100
3100 17 MarPurchase A/c. Dr
To Creditor A/c
2111
2111 20 MarCash A/c. Dr
To equity share capital A/c
To security premium reserve A/c
6000
1000
5000
31 Marsecurity premium reserve A/c. Dr
To bank A/c
1900
1900
31 MarCash A/c. Dr
To revenue A/c
12111
12111 31 MarDebtor A/c. Dr
To revenue A/c
5211
5211 31 MarCash A/c. Dr
To Debtor A/c
4100
4100 31 MarCash A/c. Dr
Debtor A/c. Dr
To Sales A/c
To Sales tax collected A/c
5280
3520
8000
800
31 MarCreditor A/c. Dr
To cash A/c
800
800 31 MarAdvertising A/c. Dr
Rent A/c. Dr
To cash a/c
3811
2211
6022