QUESTION 14 Described below are certain transactions of Cherry Company for 2017: On March 10, the company purchased goods from Apples Company for $30,000, terms 2:15. n 30. Purchases and accounts payable are recorded at gross amounts and the company uses a periodic inventory system. The invoice was paid on March 18. On May 1, the company purchased equipment for $80,000 from Peaches Company, paying $20,000 in cash and giving a one-year, 8% note for the balance. On September 30, the company borrowed 115,000, by signing a one-year zero-interest-bearing S150,000 note at National Bank Required: a. Prepare the journal entries necessary to record the transactions above using appropriate dates. (4 marks) b. Prepare the adjusting entries necessary at December 31, 2017 in order to properly report interest expense related to the above transactions. Assume straight-line amortization. (3 marks) QUESTION 11 Electro Company issued 200,000 of 10% bonds on January 1, 2018 and received cash totaling 224,924 from Astro Company. The firm uses the effective-interest method of amortizing discounts and premiums. The bonds were sold to yield an effective-interest rate of 8%. The bonds pay interest semiannually on June 30 and December 31. The maturity date of the bonds is December 31, 2024. Required: 2. Prepare the journal entry to record the issuance of the bonds on the books Electro Company. (2 marks) b. Prepare the journal entry to record the purchase of the bonds on the books of Astro Company. (2 marks) c. Prepare the journal entries to record the first two interest payments on the books of both companies. (4 marks)