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Journal Entries for Accounts and Notes Payable Logan Company had the following t

ID: 2538852 • Letter: J

Question

Journal Entries for Accounts and Notes Payable Logan Company had the following transactions Apr. 8 Issued a $48,000, 75-day, 89% note payable in payment of an account with Bennett Company May 15 Borrowed $360,000, 60-day, 996 note from Lincoln Bank. Jun. 22 Paid Bennett Company the principal and interest due on the April 8 note payable. Jul. 6 Purchased $120,000 of merchandise from Bolton Company, signed a note for 90-day, 10% interest. Jul. 14 Paid the May 15 note due Lincoln Bank. Oct. 2 Borrowed $240,000, 120-day, 12% note from Lincoln Bank. Oct. 4 Defaulted on the note payable to Bolton Company Required a. Record these transactions in general journal form. b. Record any adjusting entries for interest in general journal form. Logan Company has a December 31 year e Round answers to nearest dollar. Use 360 days for interest calculations a. General Journal Debit Credit Date Description Apr.8 0 issued a 75-day, 8% note payable in payment of an account payable. 0 0 May 15

Explanation / Answer

Journal Entries Date Account Title and explanation Debit Credit Apr, 08 Bennet companay $                  48,000       To 8% Note Payable $                     48,000 May, 15 Cash $               3,60,000          To 9% Note Payable $                 3,60,000 June, 22 8% Note $                  48,000 Interest (48000 X 8% X75/360) $                        800        To Cash $                     48,800 July, 06 Merchandise $               1,20,000         To 10% Note Payable $                 1,20,000 July, 14 9% Note $               3,60,000 Interest (360000 X 9% X60/360) $                     5,400        To Cash $                 3,65,400 Oct, 02 Cash $               2,40,000          To 12% Note Payable $                 2,40,000 Oct, 04 No Entry Dec, 31 Interest $                  10,200           To Interest Payable $                     10,200 (To Record the interest payable as on Dec 31) CALCULATION OF INTEREST PAYABLE AS ON DEC 31 Interest (120000 X 10% X90/360) For issue of July 06 $                     3,000 Interest (240000 X 12% X90/360) For issue of Oct 02 $                     7,200