Question

Journal Entries for Accounts Payable and Notes Payable Geary Company had the following P10-1B. transactions: Apr. 15 Issued a $6,000, 60-day, eight percent note payable in payment of an account with Marion Company. 22 Borrowed $50,000 from Sinclair Bank, signing a 60-day note at nine percent. 14 Paid Marion Company the principal and interest due on the April 15 note payable. 13 Purchased $15,000 of merchandise from Sharp Company; signed a 90-day note with eight percent interest. 21 Paid the May 22 note due Sinclair Bank. 2 Borrowed $38,000 from Sinclair Bank, signing a 120-day note at 12 percent. 11 Defaulted on the note payable to Sharp Company. May June July Oct. Required Record these transactions in general journal form. Record any adjusting entries for interest in general journal form. Geary Company has a Decem- ber 31 year-end. а. b.

Answer 1

Answer:

Ans-a- General journal

Date	Description	Debit ($)	Credit ($)
April 8	Accounts Payable A/c Dr.	6,000
	Notes Payable A/c		6,000
	(To record issued a 60-day,8% note payable in payment of an account payable)
May 22	Cash A/c Dr.	50,000
	Notes Payable A/c		50,000
	(To record borrowed from bank for 60 days at 9%)
June 29	Notes Payable A/c Dr.	6,000
	Interest Expense A/c Dr. ($6,000*8%*60/360)	80
	Cash A/c		6,080
	(To record note payable to Marion Company)
July 13	Inventory A/c Dr.	15,000
	Notes Payable A/c		15,000
	(To record purchased merchandise and issued a note payable with interest at 8% for 90 days)
July 21	Notes Payable A/c Dr.	50,000
	Interest Expense A/c Dr.( $50000*9%*60/360)	750
	Cash A/c		50,750
	(To record paid note payable to Sinclair Bank)
Oct.2	Cash A/c Dr.	38,000
	Notes Payable A/c		38,000
	(To record borrowed from bank for 120 days at 12%)
Oct.11	Notes Payable A/c Dr.	15,000
	Interest Expense A/c Dr. ($15,000*8%*90/360)	300
	Accounts Payable A/c		15,300
	(To record defaulted on note payable)
Ans-b-
Dec.31	Interest Expense A/c Dr. ($38000*12%*90/360)	1,140
	Interest Payable A/c		1,140
	(To record interest on the October 2 note payable to Sinclair Bank)
	Days= Oct-31-2=29 days + 30 days of Nov.+31 days of Dec.=90 days