Question

Proco had an account payable of $3,800 due to Shirmoo Inc., one of its suppliers. The amount was due to be paid on January 31
Required A Recured Use the horizontal model to show the effects (+ for addition and for subtraction of each of these transact
Required A Required B Prepare the journal entries to show each of these transactions and adjustments. (If no entry is require
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Answer #1
NO. ASSETS = LIABILITIES + SHAREHOLDER'S EQUITY NET INCOME = REVENUE - EXPENSES
A) Account payable (3800)
Notes payable 3800
B Interest payable 38 Interest expenses 38
C Cash (3876)

Interest payable (38)

Notes payable (3800)

Interest expenses 38
Date Account title and explanation Debit Credit
Feb. 1 Accounts payable 3800
         Notes payable 3800
Mar. 31 Interest expense (3800 6% x 2/12) 38
         Interest payable 38
May. 31 Interest expense (3800 6% x 2/12) 38
Interest payable 38
Note payable 3800
         Cash 3876
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