Problem - The following are selected transactions of Graves Company. Graves prepares financial statements quarterly.
Jan. 2 Purchased merchandise on account from Ally Company, $34,350, terms 3/10, n/30. (Graves uses the perpetual inventory system.)
Feb. 1 Issued a 6%, 2-month, $34,350 note to Ally in payment of account.
Mar. 31 Accrued interest for 2 months on Ally note.
Apr. 1 Paid face value and interest on Ally note.
July 1 Purchased equipment from Clark Equipment paying $17,110 in cash and signing a 7%, 3-month, $38,240 note.
Sept. 30 Accrued interest for 3 months on Clark note.
Oct. 1 Paid face value and interest on Clark note.
Dec. 1 Borrowed $13,500 from the Jonas Bank by issuing a 3-month, 6% note with a face value of $13,500.
Dec. 31 Recognized interest expense for 1 month on Jonas Bank note.
Required -
Prepare journal entries for the listed transactions and events.
Post to the accounts Notes Payable, Interest Payable, and Interest Expense.
Show the balance sheet presentation of notes and interest payable at December 31.
What is total interest expense for the year?