The following are selected transactions of Talley Company. Talley prepares financial statements quarterly.
Jan. 2 Purchased merchandise on account from Jones Company, $20,000, terms 2/10, n/30.
Feb. 1 Issued a 9%, 2-month, $20,000 note to Jones in payment of account.
Mar. 31 Accrued interest for 2 months on Jones note.
Apr. 1 Paid face value and interest on Jones note.
July 1 Purchased equipment from Seguin Equipment paying $11,000 in cash and signing a
10%, 3-month, $30,000 note.
Sept. 30 Accrued interest for 3 months on Seguin note.
Oct. 1 Paid face value and interest on Seguin note.
Dec. 1 Borrowed $15,000 from the Otago Bank by issuing a 3-month, 8% interest-bearing
note with a face value of $15,000.
Dec. 31 Recognized interest expense for 1 month on Otago Bank note.
(a) Prepare journal entries for the above transactions and events.
(c) Show the balance sheet presentation of notes payable at December 31.
(d) What is total interest expense for the year?
This Solution provided the general ledger entries for the given problem.