Record the adjusting entry at the end of the momth based on the merchandise transaction below: Jan. 5 Purchased the following merchandise from Rebis Co.: 300 reams of bond paper (P300 list price per ream) 500 pieces of ballpen (P5 list price per piece) 100 pieces of standard calculator (P400 list price per piece) Payment terms: Trade discount on total cost of 10%, cash discount of 2/10, n/30. Jan. 6 Paid freight costs on January 5 purchase, P1,000. Jan. 9 Returned 5 pieces of standard calculator to Rebis Co. due to product defects. Credit memo made by Rebis were received that day. Jan. 15 Issued a 10% simple interest note payable to Bank of P.I. to finance the January 5 purchase made, which is to be paid on February 4, 2020. The amount received is equal to the balance to be paid to Rebis Co. (Note: see transactions related to Rebis Co. to determine the cash to be received, since the purpose of this note payable financing is to avail the cash discount). Jan. 15 Paid Rebis Co. in full, using the cash obtained from issuing note payable. Record the adjusting entry at the end of the month:
Record the
Jan. 5 Purchased the following merchandise from Rebis Co.:
- 300 reams of bond paper (P300 list price per ream)
- 500 pieces of ballpen (P5 list price per piece)
- 100 pieces of standard calculator (P400 list price per piece)
Payment terms: Trade discount on total cost of 10%, cash discount of 2/10, n/30.
Jan. 6 Paid freight costs on January 5 purchase, P1,000.
Jan. 9 Returned 5 pieces of standard calculator to Rebis Co. due to product defects. Credit memo made by Rebis were received that day.
Jan. 15 Issued a 10% simple interest note payable to Bank of P.I. to finance the January 5 purchase made, which is to be paid on February 4, 2020. The amount received is equal to the balance to be paid to Rebis Co. (Note: see transactions related to Rebis Co. to determine the cash to be received, since the purpose of this note payable financing is to avail the cash discount).
Jan. 15 Paid Rebis Co. in full, using the cash obtained from issuing note payable.
Record the adjusting entry at the end of the month:
a. Accrual of interest on note payable. Use actual number of days over 360 days per year to determine the amount of interest and round off your final answer to the nearest whole number.
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