Described below are certain transactions of Marigold Corporation. The company uses the periodic...
Question:
Described below are certain transactions of Marigold Corporation. The company uses the periodic inventory system.
1. On February 2, the corporation purchased goods from Martin Company for $76,700 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 $49,000 from General Motors Company, paying $3,000 in cash and signing a one-year, 10% note for the balance of the purchase price.
3. On May 1, the corporation borrowed $78,300 from Chicago National Bank by signing an $87,420 zero-interest-bearing note due one year from May 1.
4. On August 1, the board of directors declared a $321,600 cash dividend that was payable on September 10 to stockholders of record on August 31.
Make all the journal entries necessary to record the transactions above using appropriate dates.
Journal Entry:
Journal entry can be defined as the first and crucial step in the accounting cycle that involves the systematic recording of all financial transactions. It helps to prepare the financial statements of the company.
Answer and Explanation: 1
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View this answer| Date | Particulars | Debit ($) | Credit ($) | Calculation |
|---|---|---|---|---|
| Feb. 2 | Merchandise inventory | 75,166 | ||
| To accounts payable | 75,166 | $76,700 * 98% | ||
| Feb. 28 | Accounts payable | 75,... |
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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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