Financial accounting 16th Edition by Jan Williams,Susan Haka,Mark Bettner ,Joseph Carcello

تمرين 32

Notes Payable:Accruing Interest
During thefiscal year ended December 31, Swanson Corporation engaged inthe following transaetions involving notes payable:
Aug. Borrowed $12,000 from Maple Grove Bank, signing a 45-day, l2.percent note payable.
Sept.16 Purchased office equipment from Seawald Equipment.he invoice amount was$18,000, and Seawald agreed to accept, as full payment, a 10 percent, three-monthnote for theinvoice amount.
Sept.20 Paid Maple Grove Bank thenote plus accrued interest.
Nov. Borrowed $250,000 from Mike Swanson, a major corporate stockholder.he corporation issued Swanson a $250,000, 15 percent, 90-day note payable.
Dec. Purchased merchandise inventory in the amount of $5,000 from Gathman Corporation.Gathman accepted a 90-day, 14 percent note asfull settlement ofthepurchase.Swanson Corporation uses a perpetual inventory system.
Dec.6 The $18,000 note payable to Seawald Equipment matured today.wanson paid the accrued interest onthis note and issued a new 30-day, 16 percent note payable inthe amount of$18,000 to replace thenote that matured.
Instructions:
a.repare journal entries (in general journal form) to record the above transactions.se a 360-day year in making theinterest calculations:
b.repare the adjusting entry needed at December 31, prior to closing the accounts.se one entry forallthree notes (round to the nearest dollar).
c.rovide a possible explanation why the new 30-day note payable to Seawald Equipment pays16 percent interest instead of the10percent rate charged onthe September 16note.