record transaction in general journal

Description of transaction 34. The note payable relating to the June 2 , and 10 transactions is a five-year note, with interest at the rate of 12 percent annually. Interest expense should be computed based on a 360 day year. [IMPORTANT NOTE: The original note on the computer equipment purchased on June 2 was $132,000. On June 10, eight days later, $25,250 was repaid. Interest expense must be calculated on the $132,000 for eight days. In addition, interest expense on the $106,750 balance of the loan ($132,000 less $25,250=$106,750) must be calculated for the 20 days remaining in the month of June.] 35. Income taxes are to be computed at the rate of 25 percent of net income before taxes. [IMPORTANT NOTE: Since the income taxes are a percent of the net income you will want to prepare the Income Statements through the Net Income Before Tax line. The worksheet contain all of the accounts and their balances which you can then transfer to the appropriate financial [statement.] Closing Entries 36. Close the revenue accounts. 37. Close the expense accounts. 38. Close the income summary account. 39. Close the dividends account