[padua10]

Issued a 9000 note to purchase inventory. The 3 month note payable bears interest of 8% and is due 12/1

Record accrued interest for the note

Issued a 18000, 9%, 4 month note to finance the purchase of a new clibing wall for advanced climbers. The note is due 2/1

Recorded accrued interest for the note and the Apex Bank note

Issued a 20000 note and paid 8000 cash to purchase a vehicle to transport clients to nearby climbing sites as part of a new series of climbing classes. The note bears interest of 6% and matures in 12 months

Recorded accrued interest for the Gibraltar note, the Apex Bank note, and the vehicle note.

Paid principal and interest

Recorded accrued interest for the Apex Bank note and the vehicle note.



How do I prepare a journal entry for these transactions?

[pready]

1 Debit Inventory for 9,000
Credit Notes Payable for 9,000

2. Debit Interest Expense for 9,000*8%*# of months used/12 months
Credit Interest Payable for the amount

3.Debit PP&E for 18,000
Credit Notes Payable for 18,000

4. Debit Interest Expense for 18,000*9%#of months used/12 months
Credit Interest Payable for the amount

5. Debit PP&E for 28,000
Credit Cash for 8,000
Credit Notes Payable for 20,000

6. compute anad post as before

7. Debit Notes Payable for the amount of principal paid
Debit Interest payable for the amount of interest paid
Credit Cash for the total amount paid

8. Compute and post as before

Note: To compute interest the formula is Interest= Principal * Interest Rate (Annual Rate) * Time (Number of Months used / 12 months)