Alpha Company prepares quarterly adjusting entries. On August 31, 2017, Alpha Co

Question

Alpha Company prepares quarterly adjusting entries. On August 31, 2017, Alpha Company purchased equipment with a sticker price of $8,515 and signed a note due information to prepare the general journal entry for the August 31 equipment purchase. Prepare any additional general journal adjusting entries for Fiscal Years 2017 & 2018. Additionally, prepare the general journal entry to record the payment of the note when due in 2018. General Journal Date Dcbit Credit 8/31/17 9/30/17 12/31/17 3/31/18 5/31/18

Explanation / Answer

Required journal entries are as prepared below:

Date Particulars L.F Amount ($) Amount ($) 2017 Aug-31 Equipment 8,515 Interest Suspense 1,485 Notes Payable 10,000 (For equipment purchased against note) Sep-30 Interest expense (1485*1/9) 165 Interest Suspense 165 (For interest for 1 month expensed) Dec-31 Interest expense (1485*3/9) 495 Interest Suspense 495 (For interest for 3 month expensed) 2018 Mar-31 Interest expense (1485*3/9) 495 Interest Suspense 495 (For interest for 3 month expensed) May-31 Interest expense (1485*2/9) 330 Interest Suspense 330 (For interest for 2 month expensed) Notes Payable 10,000 cash 10,000 (for cash paid)

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