Question

On December 31, 2017, Finley purchased $8,000 of merchandise inventory on a one-year, 10% note payable. Finley uses a perpetual inventory system. Read the requirements. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Requirement 1. Journalize the company's purchase of merchandise inventory on December 31, 2017 Date Accounts and Explanation Debit i Requirements - X Credit 2017 Dec. 31 1. Journalize the company's purchase of merchandise inventory on December 31, 2017 2. Journalize the company's accrual of interest expense on June 30, 2018, its fiscal year-end. 3. Journalize the company's payment of the note plus interest on December 31, 2018. Print Print Done

Answer 1

Date	Account	Debit	Credit
Dec 31	Merchandise inventory	8,000
	Notes payable		8,000
June 30	Interest expense	400
	Interest payable		400
	(8,000*10%*6/12)
Dec 31	Notes payable	8000
	Interest payable	400
	Interest expense (8,000*10%*6/12)	400
	Cash		8,800