Answer:
<h3>Walnut Enterprises</h3>
1. General Journal
Account Titles Debit Credit
a. Cash $41,400
7% Note Payable $41,400
To record the issuance of the one-year note payable.
b. Cash $128,520
Service Revenue $119,000
Sales Tax 9,520
To record the receipt of cash and Sales tax of 8%.
c. Other operating
expenses $70,500
Cash $70,500
To record the payment of the other operating expenses.
d. Sales Tax $7,920
Cash $7,920
To record payment of sales tax.
e. Interest Expense $2,173.50
Interest Payable $2,173.50
To record the interest expense.
Year 2: see attached.
Explanation:
a) Data and Analysis:
a. Cash $41,400 7% Note Payable $41,400
b. Cash $128,520 Service Revenue $119,000 Sales Tax Payable $9,520 Sales tax of 8%.
c. Other operating expenses $70,500 Cash $70,500
d. Sales Tax Payable $7,920 Cash $7,920
e. Interest Expense $2,173.50 Interest Payable $2,173.50
Year 2:
a. Sales Tax Payable $1,600 Cash $1,600
b. Cash $155,520 Service Revenue $144,000 Sales Tax $11,520
c. 7% Note Payable $41,400 Interest Expense $724.5 Interest Payable $2,173.50 Cash $44,298
d. Other operating expenses $83,500 Cash $83,500
e. Sales Tax $9,520 Cash $9,520
