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PLEASE DO PART B OF THIS ACCOUNTING PROBLEM
Transcribed Image Text:Sunland Corporation's year-end is December 31. Assuming that no adjusting entries relative to the transactions above have been
recorded, prepare any adjusting journal entries concerning interest that are necessary to present fair financial statements at
December 31. Assume straight-line amortization of discounts. (If no entry is required, select "No Entry" for the account titles and enter
O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries
before credit entries.)
No.
Date
Account Titles and Explanation
December
1.
31
2.
3.
December
31
December
31
Debit
Credit
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Described below are certain transactions of Sunland Corporation. The company uses the periodic inventory system.
1.
2.
3.
On February 2, the corporation purchased goods from Bramble Company for $66,400 subject to cash discount terms of 2/10,
n/30. Purchases and accounts payable are recorded by the corporation at net amounts after cash discounts. The invoice was
paid on February 26.
On April 1, the corporation bought a truck for $53,000 from Sunland Motors Company, paying $4,000 in cash and signing a 1-
year, 10% note for the balance of the purchase price.
On May 1, the corporation borrowed $79,400 from Chicago National Bank by signing a $88,520 zero-interest-bearing note
due 1 year from May 1.
(a)
Your Answer
Correct Answer
Your answer is correct.
Make all the journal entries necessary to record the transactions above using appropriate dates. (If no entry is required, select "No
Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not
indent manually. List all debit entries before credit entries. Record journal entries in the order presented in the problem. List all debit entries
before credit entries.)
Date
Account Titles and Explanation
ary 2
Purchases
Accounts Payable
uary 26
Accounts Payable
Debit
65072
65072
Purchase Discounts Lost
1328
Cash
Trucks
Cash
Notes Payable
1
Cash
53000
79400
Discount on Notes Payable
9120
Notes Payable
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Solution
Credit
65072
66400
4000
49000
88520
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