The following are selected transactions of Winsky Company. Winsky prepares finan

Question

The following are selected transactions of Winsky Company. Winsky prepares financial statements quarterly. Jan. 2 Purchased merchandise on account from Yokum Company, $30,000, terms 2/10, n/30. Feb. 1 Issued a 9%, 2-month, $30,000 note to Yokum in payment of account. Mar. 31 Accrued interst for 2 months on Yokum note. Apr.1 Paid face value and interest on Yokum note. July 1 Purchased equipment from Korsak Equipment paying $11,000 in cash and signing a 10%, 3-month, $40,000 note. Sept. 30 Accrued interest for 3 months on Korsak note. Prepare jountal entries for the above transactions and events (Fore multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.,) Thanks in advance!!!!!!!!

Explanation / Answer

Jan. 2 Purchased merchandise on account from Yokum Company, $30,000, terms 2/10, n/30. Dr Merchandise inventory (MI) $30,000 Cr Accounts payable (AP) $30,000 Feb. 1 Issued a 9%, 2-month, $30,000 note to Yokum in payment of account. Dr AP $30,000 Cr Notes payable $30,000 Mar. 31 Accrued interest for 2 months on Yokum note. Dr Interest expense $450 ($30,000 x 9% x 2/12) Cr Interest payable $450 Apr. 1 Paid face value and interest on Yokum note. Dr Notes payable $30,000 Dr Interest payable $450 Cr Cash $30,450 July 1 Purchased equipment from Korsak Equipment paying $11,000 in cash and signing a 10%, 3-month, $40,000 note. Dr Equipment $51,000 Cr Notes payable $40,000 Cr Cash $11,000 Sept. 30 Accrued interest for 3 months on Korsak note. Dr Interest expense $1,000 ($40,000 x 10% x 3/12) Cr Interest payable $1,000 Oct. 1 Paid face value and interest on Korsak note. Dr Notes payable $40,000 Dr Interest payable $1,000 Cr Cash $41,000 Dec. 1 Borrowed $15,000 from the Otago Bank by issuing a 3-month, 8% interest-bearing note with a face value of $15,000. Dr Cash $15,000 Cr Notes payable $15,000 Dec. 31 Recognized interest expense for 1 month on Otago Bank note Dr Interest expense $100 ($15,000 x 8% x 1/12) Cr Interest payable $100

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