Answer:
Question: From the details given, make all the journal entries necessary to record the transactions above using appropriate dates.
Pina Corporation
Journal Entries
Date Details Debit Credit
$ $
February 2 Purchases 62,034
Accounts Payable 62,034
Being credit purchase of goods at discount of 2%
February 26 Accounts Payable 62,034
Purchase - Discount 1,266
Cash 63,300
Being payment made for goods purchased
April 1 Vehicle 52,000
Cash 3,000
10% 1-year Note payable 49,000
Being purchase of vehicle by part cash, part note-payable
May 1 Cash 82,900
Note Payable - Discount 9,600
1-year Note payable 92,500
Being borrowing from bank
August 1 Dividend 280,000
Dividend Payable 280,000
Being dividend declared, not yet paid
September 10 Dividend Payable 280,000
Cash 280,000
Being cash payment of dividend
Explanation:
a) 2/10, n/30 means that the buyer is to pay within 30 days but is entitled to 2% discount if the purchase is paid for in 10 days. Since Pina records at net amounts after cash discount
To record this purchase = 63,300 * 0.02 = 1,266
= 63,300 - 1266 = $62,034
b) Since payment was made on 26th, it means the 10 day discount was not utilized hence Pina pays full price for the goods
