Denver Pharmacies, Journalize the transactions
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The following transactions of Denver Pharmacies occurred during 2011 and 2012:
2011
Jan 9 Purchased computer equipment at a cost of $9,000, signing a six-month, 6% note payable for that amount.
29 Recorded the week's sales of $64,000, three-fourths on credit, and one-fourth for cash. Sales amounts are subject to a 6% state sales tax.
Feb 5 Sent the last week's sales tax to the state.
28 Borrowed $204,000 on a four-year, 10% note payable that calls for $51,000 annual installment payments plus interest. Record the current and long-term portions of the note payable in two separate accounts.
Jul 9 Paid the six-month, 6% note, plus interest, at maturity.
Aug 31 Purchased inventory for $12,000, signing a six-month, 9% note payable.
Dec 31 Accrued warranty expense, which is estimated at 2% of sales of $603,000.
31 Accrued interest on all outstanding notes payable. Make a separate interest accrual for each note payable.
2012
Feb 28 Paid the first installment and interest for one year on the four-year note payable.
29 Paid off the 9% note plus interest at maturity.
Requirement
1.Journalize the transactions in Denver's general journal. Explanations are not required.
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Solution Summary
Your tutorial is attached in excel with instructional comments to help you follow the interest expense, interest payable and repayment entries.
Education
- BSc, University of Virginia
- MSc, University of Virginia
- PhD, Georgia State University
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