Loose Leaf for Financial Accounting: Information for Decisions
9th Edition
ISBN: 9781260158762
Author: John J Wild
Publisher: McGraw-Hill Education
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Question
Chapter 9, Problem 1GLP
1.
Summary Introduction
Introduction:
To prepare: Journal entries for of all transactions for year 2017 and 2018.
Expert Solution & Answer
Explanation of Solution
Journal entries | |||
Date | Particular | Amount($) | Amount($) |
24 Apr 2017 | Inventory a/c | 40,250 | |
Notes payable to L a/c | 40,250 | ||
(To record inventory purchased on credit ) |
- Inventory is an asset and it is increased by $40,250, therefore it is debited.
- Notes payable increases the liability by 40,250, therefore it is credited.
Journal entries | |||
Date | Particular | Amount($) | Amount($) |
19 May2017 | L a/c | 40,250 | |
Cash a/c | 5,250 | ||
Notes payable a/c | 35,000 | ||
(To record cash payment to L and notes issued ) | |||
- Cash paid to L reduces the cash and cash equivalent therefore it is credited.
- Notes payable increases the liability therefore it is credited.
Journal entries | |||
Date | Particular | Amount($) | Amount($) |
8 June 2017 | Cash a/c | 80,000 | |
Notes payable to N bank a/c | 80,000 | ||
(To record notes payable to N bank ) |
- Cash is borrowed by issuing notes payable due to which cash increases therefore cash Particular is debited.
- Notes payable to N bank increases the liability therefore it is credited.
Journal entries | |||
Date | Particular | Amount($) | Amount($) |
19 Aug 2017 | Notes payable to L a/c | 35,000 | |
Interest expense a/c | 875 | ||
Cash a/c | 35,875 | ||
(To record interest and notes amount paid to L ) |
- Notes payable issued are paid which is an expenses therefore it is debited.
- Payment of notes payable reduces cash balance therefore it is credited.
- Interest expenses are paid therefore it is debited.
Journal entries | |||
Date | Particular | Amount($) | Amount($) |
19 Aug 2017 | Notes payable to N bank a/c | 80,000 | |
Interest expense a/c | 2,400 | ||
Cash a/c | 82,400 | ||
(To record interest and notes amount paid to N bank ) |
- Notes payable to N bank is an expense therefore it is debited.
- Interest expense is a liability which is paid in cash therefore it is debited.
- Cash account balance is reduced due to payment of liability therefore it is credited.
Journal entries | |||
Date | Particular | Amount($) | Amount($) |
28 Nov 2017 | Cash a/c | 42,000 | |
Notes payable to F bank a/c | 42,000 | ||
(To record notes payable from bank F ) | |||
Journal entries | |||
Date | Particular | Amount($) | Amount($) |
31 Dec 2017 | Interest expense a/c | 308 | |
Interest payable a/c | 308 | ||
(To record accrued interest ) |
- Cash account increases because of issuing of notes payable therefore it is debited.
- Notes payable to F bank increases the liability therefore it is credited.
- Interest expense is the debited because all expenses and losses are always debited.
- Interest payable is credited because it increases the liability of the company.
Journal entries | |||
Date | Particular | Amount($) | Amount($) |
28 Jan 2018 | Notes payable to F bank a/c | 42,000 | |
Interest payable a/c | 308 | ||
Interest expense a/c | 252 | ||
Cash a/c | 42,560 | ||
(To record amount paid to F bank for notes on maturity date. ) |
- Notes payable to F bank reduces the liability therefore it is debited.
- Interest payable paid reduces the liability therefore it is debited.
- Expenses paid are always debited because it reduces the liability therefore interest expenses are debited.
- Cash account is credited because payment of liability reduces cash balance.
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Chapter 9 Solutions
Loose Leaf for Financial Accounting: Information for Decisions
Ch. 9 - Prob. 1DQCh. 9 - Prob. 2DQCh. 9 - Prob. 3DQCh. 9 - What is the combined amount (in percent) of the...Ch. 9 - What is the current Medicare tax rate? This rate...Ch. 9 - Prob. 6DQCh. 9 - Prob. 7DQCh. 9 - Prob. 8DQCh. 9 - Why are warranty liabilities usually recognized on...Ch. 9 - Prob. 10DQ
Ch. 9 - Prob. 11DQCh. 9 - Prob. 12DQCh. 9 - Prob. 13DQCh. 9 - Prob. 14DQCh. 9 - Prob. 15DQCh. 9 - Prob. 16DQCh. 9 - Prob. 1QSCh. 9 - Prob. 2QSCh. 9 - Ticketsales, Inc., receives $5,000,000 cash in...Ch. 9 - Prob. 4QSCh. 9 - Prob. 5QSCh. 9 - Prob. 6QSCh. 9 - Prob. 7QSCh. 9 - Prob. 8QSCh. 9 - Prob. 9QSCh. 9 - Prob. 10QSCh. 9 - Prob. 11QSCh. 9 - Prob. 12QSCh. 9 - Sera Corporation has made and recorded its...Ch. 9 - Prob. 15QSCh. 9 - Prob. 1ECh. 9 - Prepare any necessary entries at December 31 for...Ch. 9 - Prob. 3ECh. 9 - Prob. 4ECh. 9 - Prob. 5ECh. 9 - Prob. 6ECh. 9 - Prob. 7ECh. 9 - Prob. 8ECh. 9 - Prob. 9ECh. 9 - Hitzu Co. sold a copier costing $4,800 with a...Ch. 9 - Prob. 11ECh. 9 - Prob. 12ECh. 9 - Prob. 13ECh. 9 - Prob. 14ECh. 9 - Prob. 15ECh. 9 - Prob. 16ECh. 9 - Prob. 18ECh. 9 - Prob. 19ECh. 9 - Prob. 1PSACh. 9 - Prob. 2PSACh. 9 - Paloma Co. has four employees. FICA Social...Ch. 9 - Prob. 4PSACh. 9 - Shown here are condensed income statements for two...Ch. 9 - Prob. 6PSACh. 9 - Warner Co. entered into the following transaction...Ch. 9 - Prob. 2PSBCh. 9 - Fishing Guides Co. has four employees. FICA Social...Ch. 9 - On November10, 2017, Lee Co. began operations by...Ch. 9 - Shown here are condensed income statements for two...Ch. 9 - Prob. 6PSBCh. 9 - Prob. 9SPCh. 9 - Prob. 1GLPCh. 9 - Prob. 1FSACh. 9 - Prob. 2FSACh. 9 - Prob. 3FSACh. 9 - Prob. 1BTNCh. 9 - Prob. 2BTNCh. 9 - Assume that your team is in business and you must...Ch. 9 - Prob. 5BTN
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