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.)
Feb.		1		Issued a 9%, 2-month, $42,000 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 $12,500 in cash and signing a 10%, 3-month, $57,600 note.
Sept.		30		Accrued interest for 3 months on Marson note.
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.
Dec.		31		Recognized interest expense for 1 month on Paola Bank note.

(a) Your answer is partially correct. Prepare journal entries for the listed transactions and events. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credi Jan. 2 2 Inventory Accounts Payable Feb. 1 Accounts Payable Notes Payable Mar. 31 Interest Expense Interest Payable Apr. 1 V Notes Payable Interest Payable Cash July 1 V Equipment Cash Notes Payable Sept. 30 Interest Expense Interest Payable Oct. 1 Notes Payable Interest Payable Cash Dec 1 Cash Notes Payable Dec. 31 V Interest Expense Interest Payable