Problem 11-2A the following are selected transactions of Blanco Company. Blanco prepares financial statements quarterly. A. Prepare Journal entries for the listed transactions and events. B. Post the accounts Notes Payable, Interest payable, and Interest Expense. C. Show the balance sheet presentation of notes and interest payable at December 31. D. What is the total interest expense for the year????Jan. 2Purchased merchandise on account from Nunez Company, $28,800, terms 3/10, n/30. (Blanco uses the perpetual inventory system.)Feb. 1Issued a 9%, 2-month, $28,800 note to Nunez in payment of account.March. 31Accrued interest for 2 months on Nunez note.Apr. 1Paid face value and interest on Nunez note.July 1Purchased equipment from Marson Equipment apying $12,690 in cash and signing a 10%, 3 month, $50,400 note.Sept. 30Accrued interest for 3 months on Marson note.Oct 1Paid face value and interest on Marson note.Dec. 1Borrowed $28,800 from the Paola Bank by issuing a 3- month, 8% note with a face value of $28,800.Dec. 31Recognized interest expense for 1 month on Paola Bank note. Solution (‘A)- Journal Entries Sr No Date Account Details and Explanation Debit Credit (1) Jan,2 Merchandise Inventory 28,800 Accounts Payable 28,800 To record the merchandise purchase (2) Feb,1 Accounts Payable 28,800 Notes Payable 28,800 To record the issuance of 9% , 2 month notes payable against liability for purchase of merchandise (3) Mar 31, Interest Expense ( 28800 x 0.09 x 2/12) 432 Interest Payable 432 To record the interest due on notes payable (4) Apr,1 Notes Payable 28,800 Interest Payable 432 Cash 29,232 (5) July,1 Equipment 63,090 Cash 12,690 Notes Payable 50,400 To record the purchase of equipment against cash and issuance of 10 %, 3 months notes of $50,400 (6) Sep,30 Interest Expense 1,260 Interest Payable 1,260 To record the interest due on notes payable (7) Oct,1 Notes Payable 50,400 Interest Payable 1,260 Cash 51,66 To record the payment of Face value of notes payable and interest thereon. (8) Dec,1 Cash 28,800 Notes Payable 28,800 To record the borrowing from Paola Bank against issuance of 8%, 3 months notes payable (9) Dec 31, Interest Expense 192 Interest Payable 192 To record the accrued interest at the quarter end. (‘B) Posting of Accounts Notes Payable, Interest Expense and Interest Payable Notes Payable (4) 28,800 (7) 50,400 28,800 (2) 50,400 (5) 28,800 (8) 28,800 Interest Expense (3) 432 (6) 1260 (9) 192 Interest Payable (4) 432 (7) 1260 432 (3) 1260 (6) 192 (9) 192 (‘C ) Balance Sheet Extracts Assets Amount ($) Liabilities Amount ($) Current Liabilities Notes Payable 28,800 Interest Payable 192 28,992 (‘D) Interest Expense for The year Interest Expense = $ 1,884 (‘A)- Journal Entries Sr No Date Account Details and Explanation Debit Credit (1) Jan,2 Merchandise Inventory 28,800 Accounts Payable 28,800 To record the merchandise purchase (2) Feb,1 Accounts Payable 28,800 Notes Payable 28,800 To record the issuance of 9% , 2 month notes payable ag.

1. Problem 11-2A
the following are selected transactions of Blanco Company. Blanco prepares financial statements
quarterly.
A. Prepare Journal entries for the listed transactions and events.
B. Post the accounts Notes Payable, Interest payable, and Interest Expense.
C. Show the balance sheet presentation of notes and interest payable at December 31.
D. What is the total interest expense for the year????Jan. 2Purchased merchandise on account
from Nunez Company, $28,800, terms 3/10, n/30. (Blanco uses the perpetual inventory
system.)Feb. 1Issued a 9%, 2-month, $28,800 note to Nunez in payment of account.March.
31Accrued interest for 2 months on Nunez note.Apr. 1Paid face value and interest on Nunez
note.July 1Purchased equipment from Marson Equipment apying $12,690 in cash and signing a
10%, 3 month, $50,400 note.Sept. 30Accrued interest for 3 months on Marson note.Oct 1Paid
face value and interest on Marson note.Dec. 1Borrowed $28,800 from the Paola Bank by issuing
a 3- month, 8% note with a face value of $28,800.Dec. 31Recognized interest expense for 1
month on Paola Bank note.
Solution
(‘A)- Journal Entries
Sr No
Date
Account Details and Explanation
Debit
Credit
(1)
Jan,2
Merchandise Inventory
28,800
Accounts Payable
28,800
To record the merchandise purchase
(2)
Feb,1
Accounts Payable
28,800

2. Notes Payable
28,800
To record the issuance of 9% , 2 month notes payable against liability for purchase of
merchandise
(3)
Mar 31,
Interest Expense ( 28800 x 0.09 x 2/12)
432
Interest Payable
432
To record the interest due on notes payable
(4)
Apr,1
Notes Payable
28,800
Interest Payable
432
Cash
29,232
(5)
July,1
Equipment
63,090
Cash
12,690
Notes Payable
50,400
To record the purchase of equipment against cash and issuance of 10 %, 3 months notes of
$50,400
(6)
Sep,30
Interest Expense
1,260
Interest Payable
1,260
To record the interest due on notes payable

3. (7)
Oct,1
Notes Payable
50,400
Interest Payable
1,260
Cash
51,66
To record the payment of Face value of notes payable and interest thereon.
(8)
Dec,1
Cash
28,800
Notes Payable
28,800
To record the borrowing from Paola Bank against issuance of 8%, 3 months notes payable
(9)
Dec 31,
Interest Expense
192
Interest Payable
192
To record the accrued interest at the quarter end.
(‘B)
Posting of Accounts Notes Payable, Interest Expense and Interest Payable
Notes Payable
(4) 28,800
(7) 50,400
28,800 (2)
50,400 (5)
28,800 (8)
28,800
Interest Expense
(3) 432
(6) 1260

4. (9) 192
Interest Payable
(4) 432
(7) 1260
432 (3)
1260 (6)
192 (9)
192
(‘C ) Balance Sheet Extracts
Assets
Amount ($)
Liabilities
Amount ($)
Current Liabilities
Notes Payable 28,800
Interest Payable 192
28,992
(‘D) Interest Expense for The year
Interest Expense = $ 1,884
(‘A)- Journal Entries
Sr No
Date
Account Details and Explanation
Debit
Credit
(1)
Jan,2
Merchandise Inventory
28,800
Accounts Payable
28,800
To record the merchandise purchase
(2)
Feb,1
Accounts Payable

5. 28,800
Notes Payable
28,800
To record the issuance of 9% , 2 month notes payable against liability for purchase of
merchandise
(3)
Mar 31,
Interest Expense ( 28800 x 0.09 x 2/12)
432
Interest Payable
432
To record the interest due on notes payable
(4)
Apr,1
Notes Payable
28,800
Interest Payable
432
Cash
29,232
(5)
July,1
Equipment
63,090
Cash
12,690
Notes Payable
50,400
To record the purchase of equipment against cash and issuance of 10 %, 3 months notes of
$50,400
(6)
Sep,30
Interest Expense
1,260
Interest Payable
1,260

6. To record the interest due on notes payable
(7)
Oct,1
Notes Payable
50,400
Interest Payable
1,260
Cash
51,66
To record the payment of Face value of notes payable and interest thereon.
(8)
Dec,1
Cash
28,800
Notes Payable
28,800
To record the borrowing from Paola Bank against issuance of 8%, 3 months notes payable
(9)
Dec 31,
Interest Expense
192
Interest Payable
192
To record the accrued interest at the quarter end.
(‘B)
Posting of Accounts Notes Payable, Interest Expense and Interest Payable
Notes Payable
(4) 28,800
(7) 50,400
28,800 (2)
50,400 (5)
28,800 (8)
28,800
Interest Expense
(3) 432

7. (6) 1260
(9) 192
Interest Payable
(4) 432
(7) 1260
432 (3)
1260 (6)
192 (9)
192
(‘C ) Balance Sheet Extracts
Assets
Amount ($)
Liabilities
Amount ($)
Current Liabilities
Notes Payable 28,800
Interest Payable 192
28,992
(‘D) Interest Expense for The year
Interest Expense = $ 1,884
Sr No
Date
Account Details and Explanation
Debit
Credit
(1)
Jan,2
Merchandise Inventory
28,800
Accounts Payable
28,800
To record the merchandise purchase
(2)
Feb,1
Accounts Payable

8. 28,800
Notes Payable
28,800
To record the issuance of 9% , 2 month notes payable against liability for purchase of
merchandise
(3)
Mar 31,
Interest Expense ( 28800 x 0.09 x 2/12)
432
Interest Payable
432
To record the interest due on notes payable
(4)
Apr,1
Notes Payable
28,800
Interest Payable
432
Cash
29,232
(5)
July,1
Equipment
63,090
Cash
12,690
Notes Payable
50,400
To record the purchase of equipment against cash and issuance of 10 %, 3 months notes of
$50,400
(6)
Sep,30
Interest Expense
1,260
Interest Payable
1,260

9. To record the interest due on notes payable
(7)
Oct,1
Notes Payable
50,400
Interest Payable
1,260
Cash
51,66
To record the payment of Face value of notes payable and interest thereon.
(8)
Dec,1
Cash
28,800
Notes Payable
28,800
To record the borrowing from Paola Bank against issuance of 8%, 3 months notes payable
(9)
Dec 31,
Interest Expense
192
Interest Payable
192
To record the accrued interest at the quarter end.