Described below are certain transactions of Edwardson Corporation. The company uses the periodic...
Question:
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 $300,000 cash dividend that was payable on September 10 to stockholders of record on August 31.
Required:
Make all the journal entries necessary to record the transactions above using appropriate dates.
Journal Entry:
A properly recorded financial transaction will include the date of the transaction, debit account and credit account, transaction reference number, the total debit amount, and total credit account.
Answer and Explanation: 1
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View this answerRequired journal entries are shown below.
Edwardson Corporation
Journal Entries
| Date | Particulars | Debit ($) | Credit ($) | Calculation |
|---|---|---|---|---|
| Feb. 2 | Purchases | 68,60... |
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Journal Entries and Trial Balance in Accounting
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Chapter 3 / Lesson 10
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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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