Part A

Prepare journal entries for the following two transactions: (3 marks)

On 2 July, Cling-on Ltd issued a $12 000, 10%, 3-month note to purchase a vehicle costing $30 000. The remaining amount was paid by cash.

On 31July, Cling-on Ltds employees earned wages of $10 000, assuming that these wages earned will be paid on 5 August. PAYG withheld tax was at the amount of $800.