Jasper Sports Limited purchased inventory costing $10,000 by signing a 10% short

Question

Jasper Sports Limited purchased inventory costing $10,000 by signing a 10% short-term note payable. The purchase occurred on March 31, 2017. Jasper pays annual interest each year on March 31 Jasper's (a) purchase of inventory, (b) accrual of interest expense on December 31, 2017, and (c) payment of the note plus interest on March 31, 2018. Journalize Journalize Jaspers purchase of inventory. (Record debits first, then credits. Explanations are not required. Round your answers to the nearest whole number) Journal Entry 2017 Accounts Debit Credit Mar 31 Now journalize the accrual of interest expense on December 31, 2017 Journal Entry 2017 Accounts Debit Credit Dec 31 2018 Accounts Debit Credit Mar 31

Explanation / Answer

Date

Accounts

Debit

Credit

Mar 31, 2017

Purchases

10000

Short term note payable

10000

Dec 31, 2017

Interest Expense

10000*10%*9/12 = 750

Accrues Interest

750

Mar 31, 2018

Short term note payable

10000

Accrues Interest

750

Interest Expense

10000*10%*3/12 = 250

Cash

11000

Date

Accounts

Debit

Credit

Mar 31, 2017

Purchases

10000

Short term note payable

10000

Dec 31, 2017

Interest Expense

10000*10%*9/12 = 750

Accrues Interest

750

Mar 31, 2018

Short term note payable

10000

Accrues Interest

750

Interest Expense

10000*10%*3/12 = 250

Cash

11000

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