Your supervisor has asked you to audit some journal entries recorded by her client’s bookkeeper on the following page. Review the following transactions. If there is an error, rejournalize the entry. If the bookkeeper’s entry is correct, write OK next to the date on your paper. The fiscal period begins January 1 and ends December 31.

Apr. 4 Borrowed $ 3,500 from Stanford Bank for 90 days, discount rate 6 percent. Signed a discounted note for $ 3,500, dated April 4.
June 30 Bought a new air conditioning system (Building), giving a 90-day, 6.5 percent note, dated June 30, to Young Company, $ 55,300.
July 3 Paid the $ 3,500 note to Stanford Bank dated April 4.
Sept. 28 Paid the entire interest due to Young Company as well as $ 25,300 toward the principal. Issued a new $ 30,000, 120-day, 6.5 percent note, dated September 28.
Dec. 31 Journalized the adjusting entries for the outstanding notes owed to YoungCompany.

  • CreatedOctober 21, 2014
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