Question

Please help with the incorrect parts

Give the general journal entry to record each of the following transactions for Davidson Company 1. Issued a 6-month, 10 percent note for $74,000 to purchase two forklifts on May 14, 2019 (debit Warehouse Equipment) 2. Discounted its own 180 day, noninterest-bearing note with a principal amount of $28,000 at the Nelson Bank and Trust on May 28, 2019. The bank charged a discount rate of 8 percent. 3. Paid the May 14 note on its due date. 4. Paid the note discounted on May 28 on its due date. Analyze: What is the total interest expense for the year as a result of these transactions? Answer is not complete.

Answer 1

Answer:

Date	Account title and explanation	Debit	Credit
May 14	Warehouse Equipment	$74000
	Notes payable		$74000
	[Purchase of equipment in exchange of Note]
May 28	Cash	$26880
	Interest expense [28000 x 8% x (180/360)]	$1120
	Notes payable-Bank		$28000
	[Discounted non-interest-bearing Note]
Nov 14	Notes payable	$74,000
	Interest expense [74000 x 10% x (6/12)]	$3700
	Cash		$77700
	[Payment of Notes payable]
Nov 24	Notes payable-Bank	$28000
	Cash		$28000
	[Payment of Notes payable-Bank]