The folowing are selected transactions of Bilanco Comoany Elanco prepares financ

Question

The folowing are selected transactions of Bilanco Comoany Elanco prepares financial statements quarterby Ian. 2 Purchased merchandise on account from Nunez Company, $26,400, terms 3/10, n/30 (Blanco uses the perpetual inventory system.) ret. 1 Issued a 9%, 2-month, $26,400 not, to Nunez in payment of account. hity 1 Purchased equipment from Marsonfo4rnent pring S 10.200 in cash and signing a 10%. ) month, $60,000 note. - Borrowed $26.400 from the Paola Bark by issing a month, tace walut of $26,400. nate with Dec. 31 Recognized interest expense for i month on Paola Bank note Prepare journal entries for the lnted transactions and events ( Journal ev i the onder presented in the problem) Creit eccoont tites are automaticaly indented when amount is entered. Do nut indent manually. Record Date Account Titles and Explanation

Explanation / Answer

Date Accounts Title Dr Cr 2-Jan mercandise Inventory $26,400 Accounts Payable $26,400 1-Feb Accounts Payable $26,400 Notes payable $26,400 31-Mar Interest expenses 396 Interest payable (26400*2/12*9%) $396 1-Apr Notes payable $26,400 Interest payable 396 Cash $26,796 1-Jul Equipment $10,200 Notes payable $10,200 30-Sep Interest expenses 255 Interest payable (10200*3/12*10%) $255 1-Oct Notes payable $10,200 Interest payable 255 Cash $10,455 1-Dec Cash $26,400 Notes payable $26,400 31-Dec Interest expenses 176 Interest payable (26400*1/12*8%) $176 Notes payable Cash $26,400 Accounts Payable $26,400 Cash $10,200 Equipment $10,200 Cash 26400 Ending bal 26400 Interest expenses Interest payable 396 Interest payable 255 Interest payable 176 Bal 827 Interest payable Cash $396 Interest expenses 396 Cash $255 Interest expenses 255 Interest expenses 176 Ending bal 176 ans Balance Sheet For the year ended 31 Dec Current Liabilities Interest payable 176 Notes payable 26400 Total Current Liabilties 26576 ans Total interest expenses 827

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