Scrimiger Paints wants to upgrade its machinery and on September 20 takes out a loan from the bank in the amount of $590,000. The terms of the loan are 3.2% annual interest rate and payable in 8 months. Interest is due in equal payments each month.

A.Compute the interest expense due each month.If required, round final answer to two decimal places.

$ ?

B.Show the journal entry to recognize the interest payment on October 20, and the entry for payment of the short-term note and final interest payment on May 20.If required, round final answers to two decimal places.If an amount box does not require an entry, leave it blank.

Oct. 20 Interest Expense: ..............? ....................?

Cash: ..............? ....................?

May 20 Short-Term Notes Payable:....................? .................?

Interest Expense.......................? .....................?

Cash....................? .........................?

2

Lamplight Plus sells lamps to consumers. The company contracts with a supplier who provides them with lamp fixtures. There is an agreement that Lamplight Plus is not required to provide cash payment immediately and instead will provide payment within thirty days of the invoice date.

Additional information:

• Lamplight purchases 30 light fixtures for $25 each on August 1, invoice date August 1, with no discount terms.
• Lamplight returns 15 light fixtures (receiving a credit amount for the total purchase price per fixture of $25 each) on August 3.
• Lamplight purchases an additional 10 light fixtures for $20 each on August 19, invoice date August 19, with no discount terms.
• Lamplight pays $150 toward its account on August 22.

What amount does Lamplight Plus still owe to the supplier on August 30? What account is used to recognize this outstanding amount?

Accounts Payable: $....................?

3.

Bhakti Games is a chain of board game stores. Record entries for the following transactions related to Bhakti's purchase of inventory.

A.On October 5, Bhakti purchases and receives inventory from XYZ Entertainment for $6,000 with credit terms of 2/10 net 30.

B.On October 7, Bhakti returns $1,500 worth of the inventory purchased from XYZ.

C.Bhakti makes payment in full on its purchase from XYZ on October 14.

If an amount box does not require an entry, leave it blank.

A. Merchandise Inventory: ..................? .........................?

Accounts Payable:...................? ..........................?

B. Accounts Payable:........................? .......................?

Merchandise Inventory: ......................? .....................?

C.Accounts Payable: .........................? .........................?

Merchandise Inventory: ......................? ..........................?

Cash: .....................? ......................?