Refer to the information for Darby Corporation in E13 2 In E13 2 The following are selected 2017 transactions of Darby Corporation Sept 1 Purchased inventory from Orion Ltd on account for $50,000 Darby uses a periodic inventory system and records purchases using the gross method of accounting for p...

a Oct 118 Interest Expense 3000 Interest Payable 1000 Notes Payable 50000 Cash 54000 50000 X 8 X 912 ...

Refer to the information for Darby Corporation in E13-2. In E13-2 The following are selected 2017 transactions

Question:

Refer to the information for Darby in E13-2.
In E13-2
The following are selected 2017 transactions of Darby 1 Purchased inventory from Orion Ltd. on account for $50,000. Darby uses a periodic inventory system and records purchases using the gross method of accounting for purchase discounts.
Oct. 1 Issued a $50,000, 12-month, 8% note to Orion in payment of Darby's account.
1 Borrowed $75,000 from the bank by signing a 12-month, non-interest-bearing $81,000 note.
Instructions
(a) Prepare the journal entries for the payment of the notes at maturity.
(b) Repeat part (a) assuming Darby uses reversing entries. (Show the reversing entries at January 1, 2018.) Would the use of reversing entries be efficient for both types of notes?
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...