Reference no: EM133029397

Question - During the fiscal year ended December 31, Dunlop Corporation carried out the following transactions involving note payable.

Aug 6 Borrowed $ 11,200 from Tom Holland, issuing to him a 45 da, 12% note payable.

Sept. 16 Purchased office equipment from Hi-tech company. The invoice amount was $16,800 and Hi-tech Company agreed to accept as full payment a 3-month, 12% note for the invoice amount.

Sept. 20 Paid Tom Holland note plus accrued interest.

Nov.1 Borrowed $ 2,35,000 from Fintiba Bank at an interest rate of 12% per annum; signed a 90-days note payable for $ 2,42,256, which included a $7,056 interest charge in the face amount.

Dec.1 Purchased merchandise in the amount of $3,000 from Julia & Co. Gave in settlement a 90-day note nearing interest at 14% (Perpetual inventory system is deployed).

Dec. 16 The $16,800 note payable to Hi-Tech Company matured today. Paid the interest accrued and issued new 30-days, 12% note to replace the maturing note.

Requirements - Prepare entries in general Journal form to record the above transactions. Use a 360-day year in making the interest calculations.

Prepare the adjusting entries needed at December 31st, prior closing the accounts. Use one entry for two notes on which interest is stated separately and a separate entry for Fintiba Bank note in which interest is included in the face amount of the note.