CLICK HERE TO REVIEW LEARNING OBJECTIVES QUESTIONS Not complete Points out of 4.
ID: 2589059 • Letter: C
Question
CLICK HERE TO REVIEW LEARNING OBJECTIVES QUESTIONS Not complete Points out of 4.00 Flag question Journal Entries for Accounts and Notes Payable Logan Company had the following transactions Apr. 8 Issued a $5,000, 60-day, six percent note payable in payment of an account with Bennett Company. May 15 Borrowed $40,000 from Lincoln Bank, signing a 60-day note at nine percent. Jun. 7 Paid Bennett Company the principal and interest due on the April 8 note payable Jul. 6 Purchased $12,000 of merchandise from Bolton Company; signed a 90-day note with ten percent interest. Jul. 14 Paid the May 15 note due Lincoln Bank. Oct. 2 Borrowed $30,000 from Lincoln Bank, signing a 120-day note at 12 percent. Oct. 4 Defaulted on the note payable to Bolton Company Required a. Record these transactions in general journal form. b. Record any adjusting entries for interest in general journal form. Logan Company has a December 31 year-end Round answers to nearest dollar. Use 360 days for interest calculations. General Journal Date Description Debit Credit Apr.8 Issued a 60-day, 6 percent note payable in payment of an account payable May 15Explanation / Answer
Answer a Journal Entries Date Account Titles Debit Credit Apr.8 Accounts Payable - Bennett Company $5,000 6% Note Payable (Bennett Company) $5,000 (recording of issue of 60 days , 6% note payable in payment of accounts payable) May.15 Cash $40,000 9% Note Payable (Lincoln Bank) $40,000 (recording of borrowing from bank for 60 days at 9%) Jun.7 6% Note Payable (Bennett Company) $5,000 Interest Expense $50 Cash $5,050 (recording of payment of note with Interest) July.6 Purchases $12,000 10% Note Payable (Boltan Company) $12,000 (recording purchase of merchandise and issue of note payable at 10% for 90 days) July.14 9% Note Payable (Lincoln Bank) $40,000 Interest Expense $600 Cash $40,600 (recording of payment of note payable to Lincoln Bank) Oct.2 Cash $30,000 12% Note Payable (Lincoln Bank) $30,000 (recording of borrowing from bank for 120 days at 12%) Oct.4 10% Note Payable (Boltan Company) $12,000 Interest Expense $300 Accounts Payable (Boltan Company) $12,300 (recording of default on notes payable to Boltan Company) Answer b Journal Entries Date Account Titles Debit Credit Dec.31 Interest Expense $900 Interest Payable on Note $900 (to record interest accrued for 90 days on Oct.2 note payable to Lincoln Bank)