The following were among this year’s transactions of U.S. Yarn Shop, which uses a periodic inventory system.
Jan. 25 Bought merchandise on account from Greg Morkin, $ 5,000; terms net 30 days.
Feb. 24 Gave a 45-day, 6 percent note, dated February 24, for $ 5,000 to Greg Morkin to apply on account.
Apr. 10 Paid Greg Morkin the amount owed on the note of February 24.
May 24 Bought merchandise on account from Teskey Company, $ 7,300; terms net 30 days.
June 23 Gave a 30- day, 5.5 percent note, dated June 23, for $ 7,300 to Teskey Company to apply on account.
July 23 Paid Teskey Company the interest due on the note of June 23 and renewed the obligation by issuing a new 60-day, 6 percent note, dated July 23, for $ 7,300 (two entries).
Sept. 21 Paid Teskey Company the amount owed on the note of July 23.
25 Borrowed $ 14,000 from Vesco Bank for 90 days; discount rate is 6.5 percent. Accordingly, signed a discounted note for $ 14,000, dated September 25. (Use Interest Expense because the note will mature in the present fiscal period.)
Dec. 24 Paid Vesco Bank at maturity of note.

Record these transactions in a general journal (pages 27 and 28).

  • CreatedOctober 21, 2014
  • Files Included
Post your question