City Graphics has the following notes payable transactions.July 5Issued a $3,500 note to Roma Ceramic Inc. The 10%, 60-day note is in full payment of an account payable.July 9 Borrowed $5,000 from the bank signing a 6%, 90-day note.July 11 Paid $500 cash and issued a $2,000, 8% 30-day note to Design Center in payment of an account payable.Aug. 5 Borrowed $3,600 for 30 days from the bank on a non-interest-bearing note. The discount rate is 10%.Sept. 3 Paid the principal and interest due on the $3,500 note to Roma Ceramic Inc.Oct. 3 Paid the interest due on the $5,000 note to the bank and renewed the principal for 30 days at 7%.Required:Record these transactions in a general journal. If an amount box does not require an entry, leave it blank. Assume 360 days in a year. Page: 1POST.DATEDESCRIPTIONDEBIT CREDITREF.1July 51.2July 9345July 11678Aug. 589101011 Sept. 3111212131314 Oct. 3141515161617173.4.

Journal entry is recording of the transactions of the business in the books of accounts of the company and it is the primary book which is to prepared in order to make the financial statements.The journal entries are as follows: Date Description Debit Credit July 5 Accounts payable - Roma Notes Payable $3,500 $3,500 July 9 Cash Notes Payable $5,000 $5,000 July 11 Accounts payable - design Notes Payable Cash $2,500 $2,000 $500 August 5 Cash Discount on notes payable ($3,600 ×10% ×30360) Notes Payable $3,570 $30 $3,600 September 3 Notes Payable Interest expenses ($3,500 ×10% ×60360) Cash $3,500 $58 $3,558 October 3 Interest expense ($5,000 ×6% ×90360) Notes Payable - 6% Cash Notes Payable - 7% $75 $5,000 $75 $5,000

Answered: City Graphics has the following notes…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

City Graphics has the following notes payable transactions.

July 5	Issued a $3,500 note to Roma Ceramic Inc. The 10%, 60-day note is in full payment of an account payable.
July 9	Borrowed $5,000 from the bank signing a 6%, 90-day note.
July 11	Paid $500 cash and issued a $2,000, 8% 30-day note to Design Center in payment of an account payable.
Aug. 5	Borrowed $3,600 for 30 days from the bank on a non-interest-bearing note. The discount rate is 10%.
Sept. 3	Paid the principal and interest due on the $3,500 note to Roma Ceramic Inc.
Oct. 3	Paid the interest due on the $5,000 note to the bank and renewed the principal for 30 days at 7%.

Required:

Record these transactions in a general journal. If an amount box does not require an entry, leave it blank. Assume 360 days in a year.

Page: 1
POST.
DATE
DESCRIPTION
DEBIT CREDIT
REF.
1
July 5
1.
2
July 9
3
4
5
July 11
6
7
8
Aug. 5
8
9
10
10
11 Sept. 3
11
12
12
13
13
14 Oct. 3
14
15
15
16
16
17
17
3.
4.

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