Accounting 131-Interest-Bearing Notes Payable

The following were among transactions for the Yum Candy Co. during 2013 and 2014.

Required: Journalize the transactions, including all necessary adjusting entries.  The books are closed Dec. 31.  The company uses a perpetual inventory system.

2013

July 5   Purchased $6,000 of merchandise from Wonka Company on credit.

July 5

Aug. 3 Issued 10%, 45 day note payable in settlement on the open account, Wonka Company.

Aug. 3

Sept. 17  Paid the note and interest due to the Wonka Co.

Sept. 17

Dec. 1    Borrowed $30,000 at the Bank of Godfrey, 90 day, 12% note payable.

Dec. 1

Dec. 31          Adjusting entry

Dec. 31

2014

Mar. 1            Paid the amount due to the Bank of Godfrey.

Mar. 1