Question

The following are selected 2020 transactions of Crane Corporation.

Sept. 1		Purchased inventory from Encino Company on account for $37,600. Crane records purchases gross and uses a periodic inventory system.
Oct. 1		Issued a $37,600, 12-month, 8% note to Encino in payment of account.
Oct. 1		Borrowed $37,600 from the Shore Bank by signing a 12-month, zero-interest-bearing $41,680 note.

Prepare journal entries for the selected transactions above. (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 entries in the order displayed in the problem statement.)

Answer 1

Journal entry

Date	General Journal	Debit	Credit
Sep 1	Purchase	37600
	Account payable		37600
Oct 1	Account payable	37600
	Notes payable		37600
Oct 1	Cash	37600
	Discount on notes payable	4080
	Notes payable		41680