80.2K

Verified Solution

Link Copied!

The following are selected 2020 transactions of Teal Corporation. Sept. Purchased inventory from Encino Company on account for $40,200. Teal records purchases gross and uses a periodic inventory system. 1 Oct. Issued a $40,200, 12-month, 8 % note to Encino in payment of account. Oct. Borrowed $40,200 from the Shore Bank by signing a 12-month, zero-interest-bearing $44,240 note. 1 Prepare journal entries for the selected transactions above. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually Record entries in the order displayed in the problem statement) Account Titles and Explanation Date Debit Credit September 1 Inventory 40200 Accounts Payable October 1 September 1 Inventory 40200 Accounts Payable October 1 October 1 Prepare adjusting entries at December 31. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, eg. 5,125.) Account Titles and Explanation Date Debit Credit December 31 (To record interest on the note) December 31 (To record discount on the note) Compute the total net liability to be reported on the December 31 balance sheet for (1) The interest-bearing note (2) The zero-interest-bearing

Answer & Explanation Solved by verified expert

See Answer