A business issued a 30-day, 7% note for $50,400 to a creditor on account. The company uses a 360-day year for interest calculations.

Required:

Journalize the entries to record (a) the issuance of the note on April 30 and (b) the payment of the note at maturity, including interest. Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTS

General Ledger

ASSETS

110 Cash

111 Accounts Receivable

112 Interest Receivable

113 Notes Receivable

115 Merchandise Inventory

116 Supplies

118 Prepaid Insurance

120 Land

123 Building

124 Accumulated Depreciation-Building

125 Office Equipment

126 Accumulated Depreciation-Office Equipment

LIABILITIES

210 Accounts Payable

213 Interest Payable

214 Notes Payable

215 Salaries Payable

216 Social Security Tax Payable

217 Medicare Tax Payable

218 Employees Federal Income Tax Payable

219 Employees State Income Tax Payable

220 Medical Insurance Payable

221 Retirement Savings Deductions Payable

222 Union Dues Payable

224 Federal Unemployment Tax Payable

225 State Unemployment Tax Payable

226 Vacation Pay Payable

228 Product Warranty Payable

EQUITY

310 Common Stock

311 Retained Earnings

312 Dividends

313 Income Summary

REVENUE

410 Sales

610 Interest Revenue

EXPENSES

510 Cost of Merchandise Sold

520 Salaries Expense

525 Delivery Expense

526 Repairs Expense

531 Rent Expense

533 Insurance Expense

534 Supplies Expense

535 Payroll Tax Expense

536 Vacation Pay Expense

538 Cash Short and Over

539 Product Warranty Expense

541 Depreciation Expense-Building

542 Depreciation Expense-Office Equipment

590 Miscellaneous Expense

710 Interest Expense

Journalize the entries to record (a) the issuance of the note on April 30 and (b) the payment of the note at maturity, including interest. Refer to the Chart of Accounts for exact wording of account titles.

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JOURNAL

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