Described below are certain transactions of Teal Corporation. The company uses the periodic inventory system. 1. 2. 3. On February 2, the corporation purchased goods from Sandhill Company for $75,800 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 $50,000 from Sunland Motors Company, paying $5,000 in cash and signing a 1 year, 10% note for the balance of the purchase price. On May 1, the corporation borrowed $86,600 from Chicago National Bank by signing a $96,200 zero-interest-bearing note due 1 year from May 1
Described below are certain transactions of Teal Corporation. The company uses the periodic inventory system. 1. 2. 3. On February 2, the corporation purchased goods from Sandhill Company for $75,800 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 $50,000 from Sunland Motors Company, paying $5,000 in cash and signing a 1 year, 10% note for the balance of the purchase price. On May 1, the corporation borrowed $86,600 from Chicago National Bank by signing a $96,200 zero-interest-bearing note due 1 year from May 1
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Make all the
Transcribed Image Text:Described below are certain transactions of Teal Corporation. The company uses the periodic inventory system.
1.
2.
3.
On February 2, the corporation purchased goods from Sandhill Company for $75,800 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 $50,000 from Sunland Motors Company, paying $5,000 in cash and signing a 1-
year, 10% note for the balance of the purchase price.
On May 1, the corporation borrowed $86,600 from Chicago National Bank by signing a $96,200 zero-interest-bearing note
due 1 year from May 1.
Transcribed Image Text:Date
Account Titles and Explanation
Debit
Credit
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Transcribed Image Text:Teal 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.
1.
2.
3.
Date
December
31
December
31
December
31
Account Titles and Explanation
Debit
Credit
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