Eddie Edwards and Phil Bell own and operate The Second Hand Equipment Shop. The following transactions involving notes and interest were completed during the last three months of 20--:

Oct.1Issued a $6,800, 60-day, 5% note to Mac Farm Equipment for purchase of merchandise.15Received a $2,000, 60-day, 6% note from R. Chambers in payment for sale of merchandise.Nov.1Discounted the note received from R. Chambers on October 15 at Merchants National Bank. The discount rate is 7%.1Borrowed $5,000 from First National Bank on a three-month, non-interestbearing note that was discounted at 6%.20Received a $4,000, 90-day, 6.5% note from L. Revsine in payment of an account receivable.30Issued a check to Mac Farm Equipment in payment of the note issued on October 1, including interest.Dec.10Issued a $3,000, 90-day, 6% note to Remak Tractors to extend time for payment of an account payable.16Received notification from Merchants National Bank that R. Chambers has dishonored his note. A check is issued to cover the note plus a $20 bank fee that must be paid to the bank.Required:

1.Prepare general journal entries for the transactions.2.Prepare necessary adjusting entries for the notes outstanding on December 31.

Chart of Accounts

CHART OF ACCOUNTSThe Second Hand Equipment ShopGeneral LedgerASSETS101Cash121Notes Receivable122Accounts Receivable123Accrued Interest Receivable141Supplies145Prepaid Insurance181Equipment181.1Accumulated Depreciation-Equipment

LIABILITIES201Notes Payable201.1Discount on Notes Payable202Accounts Payable207Accrued Interest Payable219Wages Payable231Sales Tax Payable

EQUITY311Capital312Drawing313Income Summary

REVENUE401Sales411Interest Revenue

EXPENSES501Purchases511Wages Expense512Advertising Expense521Rent Expense523Supplies Expense525Phone Expense532Bad Debt Expense535Insurance Expense541Depreciation Expense-Equipment549Miscellaneous Expense551Interest Expense

Subsidiary LedgersAccounts Receivable Ledger122.1L. Revsine122.2R. Chambers

Accounts Payable Ledger202.1Remak Tractors

General Journal

1.Prepare general journal entries for the transactions.2.Prepare necessary adjusting entries for the notes outstanding on December 31.Assume a 360 day year for interest calculations.

General Journal Instructions

All transactions on this page must be entered (except for post ref(s)) before you will receive Check My Work feedback.

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GENERAL JOURNAL

Score:174/312

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Adjusting Entries

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Points:

34.02 / 61