Question

Described below are certain transactions of Nash Corporation. The company uses the periodic inventory system.

1.		On February 2, the corporation purchased goods from Martin Company for $71,000 subject to cash discount terms of 2/10, n/30. Purchases and accounts payable are recorded by the corporation at net amounts after cash discounts. The invoice was paid on February 26.
2.		On April 1, the corporation bought a truck for $52,000 from General Motors Company, paying $3,000 in cash and signing a one-year, 10% note for the balance of the purchase price.
3.		On May 1, the corporation borrowed $83,300 from Chicago National Bank by signing a $92,780 zero-interest-bearing note due one year from May 1.
4.		On August 1, the board of directors declared a $325,700 cash dividend that was payable on September 10 to stockholders of record on August 31.

Make all the journal entries necessary to record the transactions above using appropriate dates. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

Date	Account Titles and Explanation	Debit	Credit
choose a transaction date                                                                      February 2February 26April 1May 1August 1September 10	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date                                                                      February 2February 26April 1May 1August 1September 10	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date                                                                      February 2February 26April 1May 1August 1September 10	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date                                                                      February 2February 26April 1May 1August 1September 10	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date                                                                      February 2February 26April 1May 1August 1September 10	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date                                                                      February 2February 26April 1May 1August 1September 10	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount

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Nash Corporation’s year-end is December 31. Assuming that no adjusting entries relative to the transactions above have been recorded, prepare any adjusting journal entries concerning interest that are necessary to present fair financial statements at December 31. Assume straight-line amortization of discounts. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

No.	Account Titles and Explanation	Debit	Credit
1.	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
2.	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
3.	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
4.	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount

Answer 1

a) Journal entries

Date	General Journal	Debit	Credit
Feb 2	Purchase (71000*98%)	69580
	Account payable		69580
Feb 26	Account payable	69580
	Purchase discount forfeited	1420
	Cash		71000
Apr 1	Truck	52000
	Cash		3000
	10% Notes payable		49000
May 1	Cash	83300
	Discount on Note payable	9480
	Notes payable		92780
Aug 1	Cash dividend	325700
	Dividend payable		325700
Aug 10	No Journal entry
Sept 10	Dividend payable	325700
	Cash		325700

b) adjusting entry

No.	Account Titles and Explanation	Debit	Credit
1.	No Journal entry
2.	Interest expense (49000*10%*9/12)	3675
	Interest payable		3675
3.	Interest expense (9480/12*8)	6320
	Discount on notes payable		6320
4.	No Journal entry