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Homework answers / question archive / The following transactions of Lexington Marine Supply occurred during 2018 and 2019: Click the icon to view the transactions
The following transactions of Lexington Marine Supply occurred during 2018 and 2019: Click the icon to view the transactions.) Requirement 1. Record the transactions in the company's journal. Explanations are not required. (Record debits first, then credits. Exclude explanations from any journal entries. Round amounts to the nearest whole dollar.) Begin by journalizing the 2018 transactions, starting with the purchase of equipment on February 3. Feb 3: Purchased equipment for $20,000, signing a six-month, 5% note payable. Journal Entry Date Accounts Debit Credit Feb 3, 2018
More Info t co na 01 2018 Feb 3 Purchased equipment for $20,000, signing a six-month, 5% note payable. 28 Recorded the week's sales of $72,000, one-third for cash, and two-thirds on account. All sales amounts are subject to a 7% sales tax. Ignore cost of goods sold. Mar 7 Sent last week's sales tax to the state. Apr 30 Borrowed $240,000 on a four-year, 12% note payable that calls for annual payment of interest each April 30. Aug 3 Paid the six-month, 5% note at maturity. Nov 30 Purchased inventory at a cost of $9,300, signing a three-month, 4% note payable for that amount. Dec 31 Accrued warranty expense, which is estimated at 4.0% of total sales of $470,000 31 Accrued interest on all outstanding notes payable. Accrued interest for each note separately. 2019 Feb 28 Paid off the 4% inventory note, plus interest, at maturity. Apr 30 Paid the interest for one year on the long-term note payable. Print Done om
| Journal Entry | |||
| Date | Accounts | Debit | Credit |
| Feb 3 | Equipment | 20,000 | |
| 5% Notes payable | 20,000 | ||
| Feb 28 | Cash | 25,680 | |
| Accounts receivable | 51,360 | ||
| Sales | 72,000 | ||
| Sales tax payable | 5,040 | ||
| Mar 7 | Sales tax payable | 5,040 | |
| Cash | 5,040 | ||
| Apr 30 | Cash | 2,40,000 | |
| 12% Notes payable | 2,40,000 | ||
| Aug 3 | 5% Notes payable | 20,000 | |
| Interest expense | 500 | ||
| Cash | 20,500 | ||
| Nov 30 | Inventory | 9,300 | |
| 4% Notes payable | 9,300 | ||
| Dec 31 | Warranty expense | 18,800 | |
| Provision for warranty expense | 18,800 | ||
| Dec 31 | Interest expense (Refer Note 1) | 19,231 | |
| Interest payable (Refer Note 1) | 19,231 | ||
| Feb 28 | 5% Notes payable | 9,300 | |
| Interest payable | 31 | ||
| Interest expense | 62 | ||
| Cash | 9,393 | ||
| Apr 30 | Interest payable | 19,200 | |
| Interest expense | 9,600 | ||
| Cash | 28,800 | ||
| Note 1: Calculation of interest to be accured on Dec 31 | |||
| Interest to be accrued = (240,000*12%*(8/12))+(9,300*4%*(1/12) | |||
| Interest to be accrued = $19,231 |
