D. Current Liability Entries and Adjustment Described below are certain transactions of Zeus Kangaji Co. a. On February 2, the corporation purchased goods from Mr. Moon Co. for P50,000 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. b. On April 1, the corporation bought a truck for P40,000 from DY Jannis Co., paying P4,000 in cash and signing a one-year, 12% note for the balance of the purchase price. c. On May 1, the corporation borrowed P80,000 from LMK Anderson Bank by signing a P92,000 non-interest-bearing note due one year from May 1. d. On August 1, the Board of Directors declared a 300,000 cash dividend. That was payable on September 10 to shareholders of record on August 31. The Zeus Kangaji Co.’s year-end is December 31. No adjusting entries relative to the transactions above have been recorded. Requirement: Prepare any adjusting journal entries concerning interest that are necessary to present the fair financial statements at December 31. Assume straight line amortization of discounts.
D. Current Liability Entries and Adjustment
Described below are certain transactions of Zeus Kangaji Co.
a. On February 2, the corporation purchased goods from Mr. Moon Co. for P50,000 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.
b. On April 1, the corporation bought a truck for P40,000 from DY Jannis Co., paying P4,000 in cash and signing a one-year, 12% note for the balance of the purchase price.
c. On May 1, the corporation borrowed P80,000 from LMK Anderson Bank by signing a P92,000 non-interest-bearing note due one year from May 1.
d. On August 1, the Board of Directors declared a 300,000 cash dividend. That was payable on September 10 to shareholders of record on August 31.
The Zeus Kangaji Co.’s year-end is December 31. No
Requirement:
Prepare any adjusting
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