Question

CALCULATOR FULL SCREEN Problem 10-2A The following are selected transactions of Pina Colada Corp.. Pina Colada prepares financial statements quarterly Jan. 2 Purchased merchandise on account from Nunez Company, $34,800, terms 3/10, n/30. (Pina Colada uses the perpetual inventory system.) Feb. 1 Issued a 9%, 2-month, $34,800 note to Nunez in payment of account. Mar. 31 Accrued interest for 2 months on Nunez note. Apr. 1 Paid face value and interest on Nunez note. July 1 Purchased equipment from Marson Equipment paying $11,400 in cash and signing a 10%, 3-month, $52,800 note. Sept. 30 Accrued interest for 3 months on Marson note. Oct. 1 Paid face value and interest on Marson note. Dec. 1 Borrowed $21,600 from the Paola Bank by issuing a 3-month, 8% note with a face value of $21,600. Dec. 31 Recognized interest expense for 1 month on Paola Bank note. Prepare journal entries for the listed transactions and events. (Credit account titles are automatically indented when amount is entered. Do mor indent Journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit

Answer 1

Journal Entires Particulars Jan-02 Purchases A/c Dr Debit Credit Date 34800 To Nenez co A/c 34800 Feb-01 Nunez A/c Dr 34800 To 9% Notes Payable 34800 Mar-31 Accrued Interest Expense A/c Dr 522 522 To 9% Notes Payable For 2 Months(34800*2/12*9%) Apr-01 9% Notes Payable A/c 35322 To Bank A/c 35322 (34800+522)

Jul-01 Equipment A/c 64200 To Marson A/c 64200 Marson A/c 64200 11400 To Cash A/c To 10% Notes Payable A/c 52800 Sep-01 Accrued Interest Expense A/c Dr 1320 To 10% Notes Payable 1320 For 3 Months(52480*3/12*10%) Oct-01 10% Notes Payable A/c To Bank A/c 54120 54120 (52800+1320) Dec-01 Bank A/c Dr 21600 To 8% notes Payable a/c 21600 Dec-31 Accrued Interest Expense A/c Dr To 8% Notes Payable For 1 Months(21600*1/12*8%) 144 144