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Make the entries to record loan from the bank

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Reference no: EM13511910

Abacus, Inc., purchased inventory costing $95,000. Terms of the purchase were 3/10, n/30. Abacus uses a perpetual inventory system. In order to take advantage of the cash discount, Abacus borrowed $75,000 from Commercial First Bank, signing a 2-month, 8% note. The bank requires monthly interest payments. Make the entries to record the following:

1. Initial purchase of inventory on account
2. Payment to the supplier within the discount period
3. Loan from the bank
4. First month's payment to the bank
5. Second and final payment to the bank

Reference no: EM13511910

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