Don Terry opened Terry Company, an accounting practice, in Year 1. The following summarizes transactions that occurred during Year 1:

Issued a $42,000 face value discount note to First National Bank on July 1, Year 1. The note had a(n) 6 percent discount rate and a one-year term to maturity.

Recognized cash revenue of $134,000.

Incurred and paid $100,000 of operating expenses.

Adjusted the books to recognize interest expense at December 31, Year 1.

Prepared the necessary closing entries at December 31, Year 1.

The following summarizes transactions that occurred in Year 2:

Recognized $217,000 of cash revenue.

Incurred and paid $153,000 of operating expenses.

Recognized the interest expense for Year 2 and paid the face value of the note.

Prepared the necessary closing entries at December 31, Year 2.

b-1. Prepare entries in general journal form for the transactions for Year 1. b-2. Prepare entries in general journal form for the transactions for Year 2. b-3. Post the entries to the T-accounts.

A

Issued a $42,000 face value discount note to First National Bank on July 1, Year 1. The note had a 6 percent discount rate and a one-year term to maturity. Record the transaction.

B

Recognized cash revenue of $134,000. Record the transaction.

C

Incurred and paid $100,000 of operating expenses. Record the transaction.

D

Adjusted the books to recognize interest expense at December 31, Year 1. Record the transaction.

E

Record the closing entry for service revenue.

F

Record the closing entry for expenses.

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A

Recognized $217,000 of cash revenue. Record the transaction.

B

Incurred and paid $153,000 of operating expenses. Record the transaction.

C

Recognized the interest expense for Year 2. Record the transaction.

D

Paid the face value of the note. Record the transaction.

E

Record the closing entry for service revenue.

F

Record the closing entry for expenses.