Question

The January 1, Year 1 trial balance for the Carter Company is found on the trial balance tab. The beginning balances are assumed.

Gonzalez Co. entered into the following transactions involving short-term liabilities. (Use 360 days a year.)

Year 1
Apr.		20		Purchased $49,750 of merchandise on credit from Nguyen, terms n/30.
May		19		Replaced the April 20 account payable to Nguyen with a 90-day, 8%, $38,000 note payable along with paying $11,750 in cash.
July		8		Borrowed $102,000 cash from NMR Bank by signing a 120-day, 10%, $102,000 note payable.
Aug.		17		Paid the amount due on the note to Nguyen at the maturity date.
Nov.		5		Paid the amount due on the note to NMR Bank at the maturity date.
Nov.		28		Borrowed $60,000 cash from Chicago Bank by signing a 60-day, 6%, $60,000 note payable.
Dec.		31		Recorded an adjusting entry for accrued interest on the note to Chicago Bank.
Year 2
Jan.		27		Paid the amount due on the note to Chicago Bank at the maturity date.

  Prepare the journal entries related to notes and accounts payable.   Hint: Use the "Calculation of Interest" tab to ensure the accuracy of your entries.

General Schedule of Calculation of Year 2 General Trial Balance Requirement Ledger Payables Journal Interest payment General Journal tab - Prepare the Year 1 journal entries related to the notes and accounts payable of Gonzalez Co. Calculation of interest tab - Use the interest formula (P x R x T) to verify the amount of interest recorded in your entries. Verify that total interest expense agrees with the trial balance. Year 2 payment tab - Prepare the January 27, Year 2 entry to record the repayment of the note at maturity.

2) May 19. Replaced the April 20 account payable to Nguyen with a 90-day, $38,000 note bearing 8% annual interest along with paying $11,750 in cash.

3)Jul. 8. Borrowed $102,000 cash from NMR Bank by signing a 120-day, 10% interest-bearing note with a face value of $102,000.

4) Aug. 17. Paid the amount due on the note to Nguyen at the maturity date.

5) Nov. 5. Paid the amount due on the note to NMR Bank at the maturity date.

6) Nov. 28. Borrowed $60,000 cash from Chicago Bank by signing a 60-day, 6% interest-bearing note with a face value of $60,000.

7) Dec. 31 Recorded an adjusting entry for accrued interest on the note to Chicago Bank.

Options for Account Tile

• 000: No journal entry required
• 101: Cash
• 103: Account receivable - Other
• 104: Accounts receivable - Chicago
• 105: Accounts receivable - Nguyen
• 106: Accounts receivable - NMR Bank
• 109: Allowance for doubtful accounts
• 110: Notes receivable - Other
• 111: Notes receivable - Chicago
• 112: Notes receivable - Nguyen
• 113: Notes receivable - NMR Bank
• 118: Interest receivable
• 120: Merchandise inventory
• 201: Accounts payable - Other
• 202: Accounts payable - Chicago
• 203: Accounts payable - Nguyen
• 204: Accounts payable - NMR Bank
• 206: Interest payable
• 209: Salaries payable
• 220: Notes payable - Other
• 221: Notes payable - Chicago
• 222: Notes payable - Nguyen
• 223: Notes payable - NMR Bank
• 226: Unearned fees
• 301: Carter, Capital
• 302: Carter, Withdrawals
• 403: Sales
• 404: Sales returns and allowances
• 405: Sales discounts
• 406: Interest revenue
• 600: Cost of goods sold
• 602: Purchases
• 603: Purchases returns and allowances
• 604: Purchases discounts
• 640: Rent expense
• 652: Freight-in
• 655: Bad debts expense
• 660: Delivery expense
• 665: Interest expense
• 700: Income summary

Another part of this table

Options for the Account tile

• 000: No journal entry required
• 101: Cash
• 103: Account receivable - Other
• 104: Accounts receivable - Chicago
• 105: Accounts receivable - Nguyen
• 106: Accounts receivable - NMR Bank
• 109: Allowance for doubtful accounts
• 110: Notes receivable - Other
• 111: Notes receivable - Chicago
• 112: Notes receivable - Nguyen
• 113: Notes receivable - NMR Bank
• 118: Interest receivable
• 120: Merchandise inventory
• 201: Accounts payable - Other
• 202: Accounts payable - Chicago
• 203: Accounts payable - Nguyen
• 204: Accounts payable - NMR Bank
• 206: Interest payable
• 209: Salaries payable
• 220: Notes payable - Other
• 221: Notes payable - Chicago
• 222: Notes payable - Nguyen
• 223: Notes payable - NMR Bank
• 226: Unearned fees
• 301: Carter, Capital
• 302: Carter, Withdrawals
• 403: Sales
• 404: Sales returns and allowances
• 405: Sales discounts
• 406: Interest revenue
• 600: Cost of goods sold
• 602: Purchases
• 603: Purchases returns and allowances
• 604: Purchases discounts
• 640: Rent expense
• 652: Freight-in
• 655: Bad debts expense
• 660: Delivery expense
• 665: Interest expense
• 700: Income summary

Answer 1

The answer for first 4 sub-parts are attached in below picture

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Journal Entries Debit ($) 49750 Credit ! C63 Dali Accocents Title / Exploration Aprao marchandise Invento sy To accounts Payable - Nguyen (To record purchase of a inventore) 49750 may 19 Accounts payable - Nguyen 49750. To Dotes payable Odiguyen 38000 To cash 11 750 cro record conversion of accounts payable partially to la Sezemach Notes payable & semaining paid in casby cash 102000 To Notes payable - NMR Rank _ 102000 (To record boro cerin Juls Aug 15 Notes payable - Nguyen 3 Interest expense (28000x82. Xe To caso (To dolord payment of Note with interest) 8000 750 138760 Nous 102000 3400 Notes payablo -NMR Bank Interest expenses (102000% 10%X 300 ang To cash ( To record paypdent with inte rest OOPA To 5400

Nou 28 600 60000 Cash Notes payable - Chicago (To record borrowing of loan from Chicago Bank 39 340 Dec 3) Interest expensel 60000X62.X- - To Interest payable (to srecord accouiel of interest) (2) General ledger in No Data Dati Cash bebit Credit Balance q 11750 102000! Jan ol may ig Jul & Aug 17 now 5 Nou 28 48000 36,250 138250 99490 (5910) 38766 1OS5900 540 jo No - merchandiso inventory Date Debit Credit / Balance Jan ol 7500 eps 20 49750! 57250 2 No Carter, Capital Date Debit Credit Janol - Dec 31 4500 "(76073400+ 390) Balana 55500 Slooo 2

Page 3) Trial Balance (Partal Trial Balance Dec 31, 2018 Accounts Title Debit Credit cash merchandise Pouentory Carter, capital notes payable Chicago Interest payable Erst post expenses 54090 57250 51000 60000 240 GOD Total 1111390 | 111390 4 Balance in Accounts payable & Notes payable Accounts payable Total accounts payable ! NIL Notee payable - Chicago As Total Notes payable | 60000