Question

Journalize the following entries on the books of Winston Co. for August 1, September 1, and November 30. (Assume a 360-day year is used for interest calculations.) Refer to the Chart of Accounts for exact wording of account titles.Aug. 1 Winston Co. purchased merchandise for $75,000 on account from Bagley Co., terms n/30.Sept. 1 Winston Co. issued a 90-day, 6% note for $75,000 on account.Nov. 30 Winston Co. paid the amount due.CHART OF ACCOUNTSWinston Co.General LedgerASSETS110 Cash111 Accounts Receivable112 Interest Receivable113 Notes Receivable115 Inventory116 Supplies118 Prepaid Insurance120 Land123 Building124 Accumulated Depreciation-Building125 Office Equipment126 Accumulated Depreciation-Office EquipmentLIABILITIES210 Accounts Payable213 Interest Payable214 Notes Payable215 Salaries Payable216 Social Security Tax Payable217 Medicare Tax Payable218 Employees Federal Income Tax Payable219 Employees State Income Tax Payable220 Medical Insurance Payable221 Retirement Savings Deductions Payable222 Union Dues Payable224 Federal Unemployment Tax Payable225 State Unemployment Tax Payable226 Vacation Pay Payable228 Product Warranty PayableEQUITY310 Common Stock311 Retained Earnings312 Dividends313 Income Summary REVENUE410 Sales610 Interest RevenueEXPENSES510 Cost of Merchandise Sold520 Salaries Expense525 Delivery Expense526 Repairs Expense531 Rent Expense533 Insurance Expense534 Supplies Expense535 Payroll Tax Expense536 Vacation Pay Expense538 Cash Short and Over539 Product Warranty Expense541 Depreciation Expense-Building542 Depreciation Expense-Office Equipment590 Miscellaneous Expense710 Interest ExpenseJournalize the entries on the books of Winston Co. for August 1, September 1, and November 30. (Assume a 360-day year is used for interest calculations.) Refer to the Chart of Accounts for exact wording of account titles.PAGE 1JOURNALDATE DESCRIPTION POST. REF. DEBIT CREDIT1234567

Answer 1

Answer and Explanation:

The journal entries are shown below:

On Aug. 1

Merchandise Inventory $75,000

To Accounts Payable $75,000

(Being the purchase of merchandise inventory is recorded)

For recording this we debited the merchandise inventory as it increased the assets and credited the account payable as it also increased the liabilities

On Sept. 1

Accounts Payable $75,000

To Notes Payable $75,000

(Being the issued of note payable on the account is recorded)

For recording this we debited the account payable as it decreased the liabilities and credited the note payable as it increased the liabilities

On Nov. 30

Notes Payable $75,000

Interest Expense $1,125 ($75,000 × 6% × 90 days ÷ 360 days)

To Cash $76,125

(Being cash paid is recorded)

For recording this we debited the note payable and interest expense as it decreased the liabilities and increased the expense and credited the cash as it decreased the assets