General Co. entered into the following transactions involving short-term notes payable.On May 14, General purchased $40,000 merchandise from Steller Co., terms are 2/15, n/30. General uses the perpetual inventory system. On May 29, General replaced the May 14 account payable with a 60-day, $36,000 note bearing 8% annual along with paying $4,000 in cash. On July 28, General paid the amount due on the note at maturity.Prepare journal entries for all the preceding transactions and events.
What will be an ideal response?
| 5/14 | Merchandise Inventory | 40,000 | ? |
| ? | Accounts Payable | ? | 40,000 |
| 5/29 | Accounts Payable | 40,000 | ? |
| ? | Notes Payable | ? | 36,000 |
| ? | Cash | ? | 4,000 |
| 7/28 | Note Payable | 36,000 | ? |
| ? | Interest Expense ($36,000 * .08 * 60/360) | 480 | ? |
| ? | Cash | ? | 36,480 |
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