PLEASE PREPARE GENERAL ENTRIES AND ADJUSTING JOURNAL ENTRIES.

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. 1 Issued a $6,800, 60-day, 5% note to Mac Farm Equipment for purchase of merchandise. Received a $2,000, 60-day, 6% note from R. Chambers in payment for sale of merchandise. Discounted the note received from R. Chambers on October 15 at Merchants National Bank. The discontrate is 7% 15 Nov. 1 1 Borrowed $5,000 from First National Bank on a three-month, non-interestbearing note that was discounted at 6% 20 Received a $4,000, 90-day, 6.5% note from L. Revsine in payment of an account receivable. 30 Issued a check to Mac Farm Equipment in payment of the note issued on October 1, including interest 1 0 16 Dec. Issued a $3,000, 90-day, 6% note to Remak Tractors to extend time for payment of an account payable. Received 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 The Second Hand Equipment Shop General Ledger ASSETS REVENUE 401 Sales 101 Cash 121 Notes Receivable 122 Accounts Receivable 123 Accrued Interest Receivable 141 Supplies 145 Prepaid Insurance 181 Equipment 181.1 Accumulated Depreciation-Equipment 411 Interest Revenue EXPENSES 501 Purchases 511 Wages Expense 512 Advertising Expense 521 Rent Expense 523 Supplies Expense 525 Phone Expense 532 Bad Debt Expense 535 Insurance Expense 541 Depreciation Expense-Equipment 549 Miscellaneous Expense 551 Interest Expense LIABILITIES 201 Notes Payable 201.1 Discount on Notes Payable 202 Accounts Payable 207 Accrued Interest Payable 219 Wages Payable 231 Sales Tax Payable 512 Advertising Expense 521 Rent Expense 523 Supplies Expense 525 Phone Expense 532 Bad Debt Expense 535 Insurance Expense 541 Depreciation Expense-Equipment 549 Miscellaneous Expense 551 Interest Expense 181 Equipment 181.1 Accumulated Depreciation-Equipment LIABILITIES 201 Notes Payable 201.1 Discount on Notes Payable 202 Accounts Payable 207 Accrued Interest Pavable 219 Wages Payable 231 Sales Tax Payable EQUITY 311 Capital 312 Drawing 313 Income Summary Subsidiary Ledgers Accounts Receivable Ledger Accounts Payable Ledger 122.1 L. Revsine 202.1 Remak Tractors 122.2 R. Chambers 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