Question

Sara Company Purchased goods from Rama company for S.R850,000 on March 4, 2020, Sara records purchases gross and a perpetual inventory system. On April 2, Borrowed S.R120,000 from Al- Ahli Bank by signing a 12-month, 6% note, for S.R129,000 note. On May 1, Issued a S.R90,500 for 12-month, 3% note to Rama company in payment of account.

- Journalize the transactions from March 4, 2020 to December 31, 2020

Answer 1

Date	Account	Debit	Credit
04-Mar	Inventory	850000
	Accounts payable		850000
02-Apr	Cash	120000
	Discount on note payable	9000
	Notes payable		129000
01-May	Accounts payable	90500
	Notes payable		90500
31-Dec	Interest expense	6750
	Discount on note payable (9000 * 9/12)		6750
31-Dec	Interest expense (90500 * 3% * 8/12)	1810
	Interest payable		1810