Described below are certain transactions of Splish Corporation. The company uses the periodic inventory system. 1. On February 2, the corporation purchased goods from Martin Company for $71,000 subject to cash discount terms of 2/10, n/30. Purchases and accounts payable are recorded by the corporation at net amounts after cash discounts. The invoice was paid on February 26. On April 1, the corporation bought a truck for $52,000 from General Motors Company, paying $3,000 in cash and signing a one-year, 10% note for the balance of the purchase price. On May 1, the corporation borrowed $83,300 from Chicago National Bank by signing a $92,780 zero-interest-bearing note due one year from May 1. On August 1, the board of directors declared a $325,700 cash dividend that was payable on September 10 to stockholders of record on August 31. 2. 3. 4. (a) Your answer is correct. Make all the journal entries necessary to record the transactions above using appropriate dates. (If no entry is required. select "No Entry for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Debit Cr Date February 2 Account Titles and Explanation Purchases 69580 Accounts Payable February 26 Accounts Payable 69580 Purchase Discounts Lost 1420 Cash April 1 Trucks 52000 Cash Notes Payable May 1 Cash 83300 Discount on Notes Payable 9480 Notes Payable August 1 Retained Earnings 325700 Dividends Payable September 10 - Dividends Payable 325700 Cash (a) Your answer is correct. Make all the journal entries necessary to record the transactions above using appropriate dates. (If no entry is required, select "No Entry" for the account tities and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Debit Credit Account Titles and Explanation Purchases 69580 Accounts Payable 69580 Accounts Payable 69580 Purchase Discounts Lost 1420 Cash 71000 Trucks 52000 Cash 3000 Notes Payable 49000 Cash 83300 Discount on Notes Payable 9480 Notes Payable 92780 Retained Earnings 325700 Dividends Payable 325700 10 Dividends Payable 325700 Cash 325700 (b) Splish Corporation's year-end is December 31. Assuming that no adjusting entries relative to the transactions above have been recorded, prepare any adjusting journal entries concerning interest that are necessary to present fair financial statements at December 31. Assume straight-line amortization of discounts. (If no entry is required, select "No Entry for the account titles and enter for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) No. Account Titles and Explanation Debit Credit 1. 2. 3. 4
