list of accounts for all parts of this question are below Described below are ce

Question

list of accounts for all parts of this question are below

Described below are certain transactions of Lamar Company for 2018: 1. On May 10, the company purchased goods from Fox Company for $79,500, terms 2/10, n/30. Purchases and accounts payable are recorded at net amounts. The invoice was paid on May 18. 2. On June 1, the company purchased equipment for $84,000 from Rao Company, paying $33,600 in cash and giving a one-year, 9% note for the balance. 3. On September 30, the company discounted at 10% its $180,000, one-year zero-interest-bearing note at Virginia State Bank Prepare the journal entries necessary to record the transactions above using appropriate dates. (Credit account titles are automatically indented when the amount is entered. Do not ind manually.) Date Account Titles and Explanation Debit Credit May 10 May 18 June 1 September 30

Explanation / Answer

Journal Entries Date Account Title and explanation Debit Credit May ,10 Purchase $                  79,500      To Account Payable $                     79,500 (to Record the purchase on credit) May ,18 Account payable $                  79,500      To Purchase discount $                       1,590       To Cash $                     77,910 (to Record the payment of purhcase) June ,01 Equipment $                  84,000      To cash $                     33,600      To Note Payable $                     50,400 (To record the purchase of equipment) Sept , 30 Cash $               1,62,000 Discount On note payable $                  18,000      To Note Payable $                 1,80,000 (To Recordh the bill discounting) Interest Expenses $                     2,646 Dec, 31       To interest payable $                       2,646 (To Record the interest expenses) Interest amt = $ 50,400 X 9% X7/12 = $ 2,646 Dec, 31 Interest Expenses($ 18,000 X 3/12) $                     4,500       To Discount On note payable $                       4,500 (To record the amortization of discount) CURRENT LIABILITES Amount Note payable (9%) $                     50,400 Interest payable $                       2,646 Note payable (Zero interest) $               1,80,000 Less: Discount on note payable $                  13,500 $                 1,66,500 Total $                 2,19,546

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