Question

Problem 13-01 (Part Level Submission) Described below are certain transactions of Whispering Corporation. The company uses the periodic inventory system. 1. On February 2, the corporation purchased goods from Martin Company for $68,000 subject to cash discount terms of 2/10, n/30. Purchases and accounts payable are recorded by the corporation at net amounts after cash discounts. The invoice was paid on February 26. 2. On April 1, the corporation bought a truck for $48,000 from General Motors Company, paying $3,000 in cash and signing a one-year, 12% note for the balance of the purchase price. 3. On May 1, the corporation borrowed $88,700 from Chicago National Bank by signing a $96,980 zero-interest-bearing note due one year from May 1. 4. On August 1, the board of directors declared a $283,500 cash dividend that was payable on September 10 to stockholders of record on August 31. (b) Your answer is partially correct. Try again. Whispering Corporation’s year-end is December 31. Assuming that no adjusting entries relative to the transactions above have been recorded, prepare any adjusting journal entries concerning interest that are necessary to present fair financial statements at December 31. Assume straight-line amortization of discounts. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) No. Account Titles and Explanation Debit Credit 1. enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount 2. enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount 3. enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount 4. enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount SHOW LIST OF ACCOUNTS LINK TO TEXT Attempts: 1 of 3 used SAVE FOR LATER SUBMIT ANSWER

Answer 1

Answer:

Adjustment journal entries on year end i.e. on 31st December
Date	Accounts titles and Explanation	Debit ($)	Credit ($)
1	No entry	-	-
2	Interest Expense(48000-3000)*12%*9/12)	4,050
	Interest payable on 12% Note		4,050
	(To record of interest expense on 12% note for 9 months)
3	Interest Expense((96980-88700)*8*12)	5,520
	Discount on Note Payable		5,520
	(To record amortization of discount on note payable)
4	No entry	-	-