The following are selected transactions of Lindblom Company. Lindblom prepares financial statements quarterly.
Jan. 2 Purchased merchandise on account from Evers Company, $20,000, terms 2/10, n/30. (Lindblom uses the perpetual inventory system.)
Feb. 1 Issued a 12%, 2-month, $20,000 note to Evers in payment of account.
Mar. 31 Accrued interest for 2 months on Evers note.
Apr. 1 Paid face value and interest on Evers note.
July 1 Purchased equipment from Francisco Equipment paying $12,000 in cash and signing a 10%, 3-month, $40,000 note.
Sept. 30 Accrued interest for 3 months on Francisco note.
Oct. 1 Paid face value and interest on Francisco note.
Dec. 1 Borrowed $25,000 from the National Bank by issuing a 3-month, 12% note with a face value of $25,000.
Dec. 31 Recognized interest expense for 1 month on National Bank note.

(a) Prepare journal entries for the above transactions and events.
(b) Post to the accounts, Notes Payable, Interest Payable, and Interest Expense.
(c) Show the balance sheet presentation of notes and interest payable at December 31.
(d) What is total interest expense for the year?

  • CreatedJanuary 30, 2014
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