Described below are certain transactions of Edwardson Corporation. The company uses the periodic...


Described below are certain transactions of Edwardson Corporation. The company uses the periodic inventory system.

1. On February 2, the corporation purchased goods from Martin Company for $70,000 subject to cash discount terms of 2/10, n/30. Purchases and accounts payable are recorded by the corporation at net amounts after cash discounts. The invoice was paid on February 26.

2. On April 1, the corporation bought a truck for $50,000 from General Motors Company, paying $4,000 in cash and signing a 1-year, 12% note for the balance of the purchase price.

3. On May 1, the corporation borrowed $83,000 from Chicago National Bank by signing a $92,000 zero-interest-bearing note due 1 year from May 1.

4. On August 1, the board of directors declared a $300,000 cash dividend that was payable on September 10 to stockholders of record on August 31.


Make all the journal entries necessary to record the transactions above using appropriate dates.

Journal Entry:

A properly recorded financial transaction will include the date of the transaction, debit account and credit account, transaction reference number, the total debit amount, and total credit account.

Answer and Explanation: 1

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Required journal entries are shown below.

Edwardson Corporation

Journal Entries

DateParticularsDebit ($)Credit ($)Calculation
Feb. 2Purchases68,60...

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Learn more about this topic:

Journal Entries and Trial Balance in Accounting


Chapter 3 / Lesson 10

Discover the meaning of a journal entry and a trial balance, types of journal entries, how a general ledger differs from a trial balance, and some examples.

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