Described below are certain transactions of Carla Corporation. The company uses the periodic inventory system 1. 2. 3. On February 2, the corporation purchased goods from Buffalo Company for $73,500 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 $55,000 from Blossom Motors Company, paying $3,000 in cash and signing a 1-year, 12% note for the balance of the purchase price. On May 1, the corporation borrowed $86,000 from Chicago National Bank by signing a $94,640 zero-interest-bearing note due 1 year from May 1. (a) 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 72030 72030 Purchase Discounts Lost 1470 Cash Trucks Notes Payable Cash Cash Discount on Notes Payable Notes Payable 55000 86000 8640 Credit 72030 73500 52000 3000 94640 (b) Carla 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.) Date Account Titles and Explanation December 31 December 31 December 31 Debit Credit

Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter5: Accounting For Retail Businesses
Section: Chapter Questions
Problem 1COMP: Palisade Creek Co. is a retail business that uses the perpetual inventory system. The account...
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Described below are certain transactions of Carla Corporation. The company uses the periodic inventory system
1.
2.
3.
On February 2, the corporation purchased goods from Buffalo Company for $73,500 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 $55,000 from Blossom Motors Company, paying $3,000 in cash and signing a
1-year, 12% note for the balance of the purchase price.
On May 1, the corporation borrowed $86,000 from Chicago National Bank by signing a $94,640 zero-interest-bearing note
due 1 year from May 1.
(a)
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
72030
72030
Purchase Discounts Lost
1470
Cash
Trucks
Notes Payable
Cash
Cash
Discount on Notes Payable
Notes Payable
55000
86000
8640
Credit
72030
73500
52000
3000
94640
Transcribed Image Text:Described below are certain transactions of Carla Corporation. The company uses the periodic inventory system 1. 2. 3. On February 2, the corporation purchased goods from Buffalo Company for $73,500 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 $55,000 from Blossom Motors Company, paying $3,000 in cash and signing a 1-year, 12% note for the balance of the purchase price. On May 1, the corporation borrowed $86,000 from Chicago National Bank by signing a $94,640 zero-interest-bearing note due 1 year from May 1. (a) 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 72030 72030 Purchase Discounts Lost 1470 Cash Trucks Notes Payable Cash Cash Discount on Notes Payable Notes Payable 55000 86000 8640 Credit 72030 73500 52000 3000 94640
(b)
Carla 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.)
Date
Account Titles and Explanation
December
31
December
31
December
31
Debit
Credit
Transcribed Image Text:(b) Carla 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.) Date Account Titles and Explanation December 31 December 31 December 31 Debit Credit
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