1.On July 1 st , 2009, Charles Limited purchased $178,000 of Equipment from Call

Question

1.On July 1st, 2009, Charles Limited purchased $178,000 of Equipment from Callaghan Limited, on account, using a 6- month Note Payable- 8%.

The account was paid in full on the maturity date of the Note.

Required:

a.Prepare Journal Entries to record the Purchase by Charles Ltd.

July 1

Account

Debit

Credit

Dec 31…. Payment, including Interest

Account

Debit

Credit

Prepare Journal Entries to record the following transactions for Herman Inc... Herman prepares Adjusting Entries at the end of each month.

Account

Debit

Credit

Explanation / Answer

Jul-01 Equipment 178000          Note Payable 178000 Dec-31 Note Payable 178000 Interest expense 7120 =178000*8%/12*6         Cash 185120

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