Problem 10-2A Ermlar Corporation sells rock-climbing products and also operates

Question

Problem 10-2A Ermlar Corporation sells rock-climbing products and also operates an indoor climbing facility for climbing enthusiasts. During the last part of 2014, Ermlar had the following transactions related to notes payable. Issued a $14,400 note to Lippert to purhase inventory. The 3-month note payable bears interest of 8% and is due December 1 Recorded accrued interest for the Lippert note. Sept. 1 Ermlar uses a perpetual invertory system Sept.30 Oct. 1 Issued a $20,400 8% 4-month note to Shanee Bank to finance the purchase of a new dimbing wall ror advanced climbers. The note is due February 1. Oct. 31 Recorded accrued interest for the Lippert tnote and the Shanee Bank note. Nov. 1 Issued a $28,800 note and paid S7,800 cash to purchase a vehicle to transport clients to nearby climbing sites as part of a new series of climbing classes. This n te bears interest or 6% and matures in 12 months. Nov. 30 Recorded accrued interest for the Lippert note, the Shanee Bank note, and the vehicle note. Dec. 1 Paid principal and interest on the Lippert note. Dec. 31 Recorded accrued interest for the Shanee Bank note and the vehicle note. Your answer is cotrect. Prepare journal entries for the transactions noted above. (Credit account tities are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the probiem) Date Debit Credit ventory 14400 Notes Payable 14400 30 Interest Expense 96 Interest Payable 96 Oct. 1 20400 Notes Payable 20400 Oct. 31 Interest Expense 232 Interest Payable 232 Nov. 1 36600 Notes Payable 2BB00 Cash BOD Nov. 30 Interest Expense 376 Interest Payable 376 Dec. 1 Notes Payable 14400 nterest Payable 2BB Cash 14688 Dec. 31 Interest Expense 2B0 Interest Pavable 2B0

Explanation / Answer

Notes Payable Date Particulars Amount Date Particulars Amount 01-12-16 Cash 14400 01-09-16 Inventory 14400 01-10-16 Equipment 20700 C/b 49500 01-11-16 Equipment 28800 63900 63900 Interest Expenses Date Particulars Amount Date Particulars Amount 30-09-16 Interest Payable 96 31-10-16 Interest Payable 232 C/b 984 30-11-16 Interest Payable 376 31-12-16 Interest Payable 280 984 984 Interest Payable Date Particulars Amount Date Particulars Amount 01-12-16 Cash 288 30-09-16 Interest Expenses 96 31-10-16 Interest Expenses 232 C/b 696 30-11-16 Interest Expenses 376 31-12-16 Interest Expenses 280 984 984

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