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On February 2, the corporation purchased goods from Martin Company for $70,000 subject to cash discount terms of 2/10, n/30.

On February 2, the corporation purchased goods from Martin Company for $70,000 subject to cash discount terms of 2/10, n/30. Purchases and accounts payable are recorded by the corporation at net amounts after cash discounts. The invoice was paid on February 26. 2. On April 1, the corporation bought a truck for $50,000 from General Motors Company, paying $4,000 in cash and signing a one-year 12% interest-bearing note for the balance of the purchase price. 3. On May1, the corporation borrowed $83,000 from Chicago National bank by signing a $92,000 zero-interest-bearing note due one year from May 1. 4. On August 1, the board of directors declared a $300,000 cash dividend that was payable on September 10 to stockholders of record on August 31. Required: Prepare all the journal entries necessary to record the transactions noted above as they occurred and any adjusting journal entries relative to the transactions that would be required to present fair financial statements at December 31. Date each entry. For simplicity, assume that adjusting entries are recorded only once a year on December 31. Edwardson Corporation s year-end is December 31. Assume straight-line amortization of discounts.

This question was asked on Jan 24, 2013.

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