FIN ACC 557 P11-2A Winsky Company
Accounting Principles
Financial Accounting 5th Edition: Weygandt, Kieso, and Kimmel,
Axia College of University of Phoenix (UoP)
Financial Accounting
Problem 11-2A The following are selected transactions of Winsky Company. Winsky prepares financial statements quarterly. SOLUTION
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.
Show the balance sheet presentation of notes payable at December 31. What is total interest expense for the year?
