These are selected transactions of Waterway Company. Waterway prepares financial statements quarterly. Jan. 2 Purchased merchandise on account from Nunez Company, $42,000, terms 3/10, n/30. (Waterway uses the perpetual inventory system.) Issued a 9%, 2-month, $42,000 note to Nunez in payment of account. Accrued interest for 2 months on Nunez note. Feb. 1 Mar. 31 Apr. 1 July 1 Paid face value and interest on Nunez note. Purchased equipment from Marson Equipment paying $12,500 in cash and signing a 10%, 3-month, $57,600 note. Accrued interest for 3 months on Marson note. Sept. 30 Oct. 1 Paid face value and interest on Marson note. Dec. 1 Borrowed $19,200 from the Paola Bank by issuing a 3-month, 8% note with a face value of $19,200. Recognized interest expense for 1 month on Paola Bank note. Dec. 31 Notes Payable 4/1 42.000 2/1 42,000 10/1 57,600 7/1 57,600 12/1 19,200 12/31 Bal. Interest Payable 4/1 3/31 10/1 9/30 12/31 Interest Expense