ournal Entries (Note Issued, Renewed, and Paid) May 1 Purchased $5,000 worth of equipment from a supplier on account. June 1 Issued a $5,000, 30-day, 6% note in payment of the account payable. July 1 Paid $500 cash plus interest to the supplier, extending the note for 30 days from July 1. 31 Paid the note in full. Aug. 10 Issued a $3,500, 60-day, 7% note to a supplier for purchase of
ournal Entries (Note Issued, Renewed, and Paid) May 1 Purchased $5,000 worth of equipment from a supplier on account. June 1 Issued a $5,000, 30-day, 6% note in payment of the account payable. July 1 Paid $500 cash plus interest to the supplier, extending the note for 30 days from July 1. 31 Paid the note in full. Aug. 10 Issued a $3,500, 60-day, 7% note to a supplier for purchase of
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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May 1 Purchased $5,000 worth of equipment from a supplier on account.
June 1 Issued a $5,000, 30-day, 6% note in payment of the account payable.
July 1 Paid $500 cash plus interest to the supplier, extending the note for 30 days from July 1.
31 Paid the note in full.
Aug. 10 Issued a $3,500, 60-day, 7% note to a supplier for purchase of merchandise.
Prepare general journal entries for the transactions. Assume 360 days in a year.
Transcribed Image Text:Page: 1
DOC. POST.
DATE
ACCOUNT TITLE
DEBIT
CREDIT
NO. REF.
20--
Equipment
5,000
1
May 1
Accounts Payable
5,000V 2
4
Jun. 1
Accounts Payable
5,000
Notes Payable
5,000
Jul. 1
Equipment
500
7
8.
Interest Expense
25
8.
6.
Notes Payable (new note)
9.
10
Cash
525
10
11
11
12 Jul. 31
Notes Payable
5,000
12
13
Interest Expense
25
13
14
Cash
5,025 X
14
15
15
16 Aug. 10 Purchases
3,500
16
17
Notes Payable
3,500
V 17
3.
X X
3.
5 67
2.
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