The following are selected transactions of Graves Company. Graves prepares financial statements quarterly. Jan. 2 Purchased merchandise

Question:

The following are selected transactions of Graves Company. Graves prepares quarterly.
Jan. 2 Purchased merchandise on account from Ally Company, $30,000, terms 2/10, n/30. (Graves uses the perpetual inventory system.) Feb. 1 Issued a 6%, 2-month, $30,000 note to Ally in payment of account.
Mar. 31 Accrued interest for 2 months on Ally note.
Apr. 1 Paid and interest on Ally note.
July 1 Purchased equipment from Clark Equipment paying $8,000 in cash and signing a 7%, 3-month, $40,000 note.
Sept. 30 Accrued interest for 3 months on Clark note.
Oct. 1 Paid and interest on Clark note.
Dec. 1 Borrowed $15,000 from the Jonas Bank by issuing a 3-month, 6% note with a of $15,000.
Dec. 31 Recognized interest expense for 1 month on Jonas Bank note.

Instructions
(a) Prepare journal entries for the listed transactions and events.
(b) Post to the accounts Notes Payable, Interest Payable, and Interest Expense.
(c) Show the presentation of notes and interest payable at December 31.
(d) What is total interest expense for the year?

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