On December 31?, 2017?, Jellison purchased $ 6 ,000 of merchandise inventory on

Question

On December 31?, 2017?, Jellison purchased $ 6 ,000 of merchandise inventory on a? one-year, 11?% note payable. Jellison uses a perpetual inventory system. ?(Record debits? first, then credits. Select the explanation on the last line of the journal entry? table.)

Requirement 1. Journalize the? company's purchase of merchandise inventory on December 31?, 2017.

Requirement 2. Journalize the? company's accrual of interest expense on June 30?, 2018?, its fiscal? year-end.

Requirement 3. Journalize the? company's payment of the note plus interest on December 31?, 2018. ?(Prepare a single compound entry for this? transaction.)

Explanation / Answer

Journal entry :

Date account & explanation debit credit Dec 31,2017 Merchandise inventory 6000 Notes payable 6000 (To record purchase) June 30,2018 Interest expense 330 Interest payable (6000*11%*6/12) 330 (To record accured interest) Dec 31,2018 Notes payable 6000 Interest payable 330 Interest expense 330 Cash 6660 (To record payment)

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