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On December 31, 2017, Cimmaron purchased $14
On December 31, 2017, Cimmaron purchased $14.000 of merchandise inventory on a one-year, 10% note payable. Cimmaron uses a perpetual inventory system Read the requirements. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Requirement 1. Joumalize the company's purchase of merchandise inventory on December 31, 2017 Date Accounts and Explanation Debit Credit Requirements 2017 Dec. 31 1. Journalize the company's purchase of merchandise inventory on December 31, 2017 2. Journalize the company's accrual of interest expense on June 30, 2018, its fiscal year-end. 3. Journalize the company's payment of the note plus interest on December 31, 2018 Done Print Credit Requirement 2. Journalize the company's accrual of interest expense on June 30, 2018, its fiscal year-end Date Accounts and Explanation Debit 2018 Jun. 30 Requirement 3. Joumalize the company's payment of the note plus interest on December 31, 2018. (Prepare a single compound entry for this transaction.) Date Accounts and Explanation Debit Credit 2018 Dec. 31
Expert Solution
| Date | Account and Explanation | Debit | Credit |
| Dec.31, 2017 | Inventory | 14,000 | |
| Note payable | 14,000 | ||
| June 30, 2018 | Interest expense | 700 | |
| Interest payable | 700 | ||
| Dec. 31, 2018 | Note payable | 14,000 | |
| Interest Payable | 700 | ||
| Interest expense | 700 | ||
| Cash | 15,400 |
Interest expense on June 30 = 14,000 x 10% x 6/12 = 700
Interest expense on Dec. 31 = 14,000 x 10% x 6/12 = 700
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