The following are selected transactions of Winsky Company. Winsky prepares financial statements quarterly. Jan. 2 Purchased merchandise on account from Yokum Company, $30,000, terms 2/10, n/30. Feb. 1 Issued a 9%, 2-month, $30,000 note to Yokum in payment of account. Mar. 31 Accrued interest for 2 months on Yokum note. Apr. 1 Paid face value and interest on Yokum note. July 1 Purchased equipment from Korsak Equipment paying $11,000 in cash and signing a 10%, 3-month, $40,000 note. Sept. 30 Accrued interest for 3 months on Korsak note. Oct. 1 Paid face value and interest on Korsak note. Dec. 1 Borrowed $15,000 from the Otago Bank by issuing a 3-month, 8% interest-bearing note with a face value of $15,000. Dec. 31 Recognized interest expense for 1 month on Otago Bank note.
a) Prepare journal entries for the above transactions and events.
b) Post to the accounts Notes Pay, Interest Pay, and Interest Exp.
SOLUTION
