These are selected transactions of Sheffield Company. Sheffield prepares financial statements quarterly. Jan. 2 Purchased merchandise on account from Nunez Company, $28,000, terms 2/10, n/30. (Sheffield uses the perpetual i Feb. 1 Issued a 9%, 2-month, $28,000 note to Nunez in payment of account. Mar. 31 Accrued interest for 2 months on Nunez note. Apr. 1 Paid face value and interest on Nunez note. July 1 Purchased equipment from Marson Equipment paying $10,000 in cash and signing a 10%, 3-month, $55,200 note. Sept. 30 Accrued interest for 3 months on Marson note. Oct. 1 Paid face value and interest on Marson note. Dec. 1 Borrowed $32,400 from the Paola Bank by issuing a 3-month, 8% note with a face value of $32,400. Dec. 31 Recognized interest expense for 1 month on Paola Bank note. Date Account Titles and Explanation Debit Jan. 2 Inventory 28000 Accounts Payable Feb. 1 Accounts Payable 28000 Notes Payable Mar. 31 4 Interest Expense 420 Interest Payable Apr. 1 Notes Payable 28000 Interest Payable 420 Cash July 1 Equipment 65200 Cash Notes Payable Sept. 304 Interest Expense 1380 Interest Payable Oct. 1 Notes Payable 55200 Interest Payable 1380 Cash Dec. 1 Cash 32400 Notes Payable Dec. 31 Interest Expense 216 Interest Payable Notes Payable 4/1 28000 2/1 28000 10/1 55200 7/1 55200 12/1 32400 12/31 Bal. 32400 Interest Payable 4/1 420 2 10/1 1380 OOOO 12/31 Bal. 4 216 Interest Expense 7/1 429 4/1 420 12/1 1380 10/1 1380 12/31 216 00 These are selected transactions of Sheffield Company. Sheffield prepares financial statements quarterly. Jan. 2 Purchased merchandise on account from Nunez Company, $28,000, terms 2/10, n/30. (Sheffield uses the perpetual i Feb. 1 Issued a 9%, 2-month, $28,000 note to Nunez in payment of account. Mar. 31 Accrued interest for 2 months on Nunez note. Apr. 1 Paid face value and interest on Nunez note. July 1 Purchased equipment from Marson Equipment paying $10,000 in cash and signing a 10%, 3-month, $55,200 note. Sept. 30 Accrued interest for 3 months on Marson note. Oct. 1 Paid face value and interest on Marson note. Dec. 1 Borrowed $32,400 from the Paola Bank by issuing a 3-month, 8% note with a face value of $32,400. Dec. 31 Recognized interest expense for 1 month on Paola Bank note. Date Account Titles and Explanation Debit Jan. 2 Inventory 28000 Accounts Payable Feb. 1 Accounts Payable 28000 Notes Payable Mar. 31 4 Interest Expense 420 Interest Payable Apr. 1 Notes Payable 28000 Interest Payable 420 Cash July 1 Equipment 65200 Cash Notes Payable Sept. 304 Interest Expense 1380 Interest Payable Oct. 1 Notes Payable 55200 Interest Payable 1380 Cash Dec. 1 Cash 32400 Notes Payable Dec. 31 Interest Expense 216 Interest Payable Notes Payable 4/1 28000 2/1 28000 10/1 55200 7/1 55200 12/1 32400 12/31 Bal. 32400 Interest Payable 4/1 420 2 10/1 1380 OOOO 12/31 Bal. 4 216 Interest Expense 7/1 429 4/1 420 12/1 1380 10/1 1380 12/31 216 00
