Question

Where did i make my mistake? Please help me solve where i loss or suppose to gain 5000 more on my total. I keep over looking and i don't know where i messed up.

Year 1 5-Jan Purchased equipment for $100,000, signing a 9 month, 7% note payable. 26-Jan Recorded the week's sales of $80,000, 70% on account and 30% cash. All sales are subject to a 7% sales tax. 7-Feb Remitted last week's sales tax to the appropriate government agency. 1-May Borrowed $150,000 on a 5 year, 8% note payable calling for annual interest beginning next May 1. 1-Oct Issued $100,000 5 year, 10%, semiannual bonds payable. The bonds were issued at 105. 5-Oct Paid off the January 5 note payable. 30-Nov Purchased inventory at a cost of $7,200, signing a 3 month, 6% note payable for that amount. 31-Dec Accrued warranty expense is estimated at 3% of total sales of $900,000 (assume the sales were already recorded). 31-Dec Record accrued interest on all outstanding notes and bonds payable (make a separate journal entry for each. HINT: there are two notes and one bond-3 entries). Year 2 28-Feb Paid off the November 6% inventory note plus interest at maturity. 1-Apr Paid the interest due on the semi-annual bonds. 1-May Paid the interest for one year on the long term note payable. Dan's Dependable Delivery General Journal Page 1 Post Ref. Debit Credit 100000 100000 Date Account Year 1 January 5 Equipment Note Payable 26 Cash Accounts Receivable Sales Sales Tax Payable February | 7 Sales Tax Payable 25680 599201 80000 5600 5600

Answer 1

The following entries are required to be rectified.

Date	Account	Post Ref.	Debit	Credit
Year 1
October 1	Cash		105000
	Bonds payable			100000
	Premium on bonds payable			5000
October 5	Note payable		100000
	Interest expense ($100000 x 7% x 9/12)		5250
	Cash			105250
December 31	Interest expense ($7200 x 6% x 1/12)		36
	Interest payable			36
December 31	Interest expense		2250
	Premium on bonds payable ($5000 x 3/60)		250
	Interest payable ($100000 x 10% x 3/12)			2500
Year 2
February 28	Note payable		7200
	Interest payable		36
	Interest expense ($7200 x 6% x 2/12)		72
	Cash			7308
April 1	Interest payable		2500
	Interest expense		2250
	Premium on bonds payable ($5000 x 3/60)		250
	Cash ($100000 x 10% x 6/12)			5000