The following were among the transactions of Carpenter Company during this year. The firm, whose fiscal year ends on December 31, uses a periodic inventory system.
June 12 Gave a 30-day, 5.5 percent note, dated June 12, for $ 60,000 to Paschal, Inc., for an addition to the building.
15 Borrowed $ 28,000 from Menso Bank, signing a 3-month, 6 percent note, dated June 15, for that amount ( received full face value).
July 12 Paid Paschal, Inc., the amount owed on the note of June 12.
12 Gave a 120-day, 6.5 percent note, dated July 12, for $ 8,245 to Clarkson, Inc., for office equipment. The invoice was not previously recorded.
Sept. 15 Paid interest on the note issued to Menso Bank; renewed the loan by issuing a new 60-day, 6.5 percent note, dated September 15.
Nov. 9 Paid Clarkson, Inc., the amount owed on the note of July 12.
14 Gave the following two notes to NadCo in settlement of its November 14 invoice for merchandise: $ 11,500 note for 30 days at 6 percent, dated November 14; $ 10,300 note for 60 days at 6 percent, dated November 14. The invoice was not previously recorded.
14 Paid the note given to Menso Bank.
18 Borrowed $ 35,000 from Tragar Bank for 30 days; discount rate is 7.25 percent. Accordingly, signed a discounted note for $ 35,000, dated November 18.
Dec. 14 Paid the amount owed on the 30-day note given to NadCo.
15 Issued a 90-day, 6.5 percent note, dated December 15, to Hazel Company in settlement of November 15 invoice for merchandise, $ 16,538. The invoice was previously recorded.
18 Paid Tragar Bank at maturity of note.

1. Record these transactions in a general journal (pages 18– 21).
2. Immediately after each journal entry, record each note in the notes payable register. Fill in the date paid after journalizing the entry to pay the note or fill in “renewed” if not paid.
3. On December 31, record the adjusting entries to adjust for accrued interest expense for the NadCo and Hazel notes.
4. On January 1, record the reversing entry. (Assume that closing entries have been made.)
5. On January 13, record the payment of the note to NadCo. 6. On March 15, record the payment of the note to Hazel Company.

  • CreatedOctober 21, 2014
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