Question - On December 1, 2013, Insto Photo Company purchased merchandise, invoice price $25,000, and issued a 12%, 120-day note to Ringo Chemicals Company. Insto uses the calendar year as its fiscal year and uses the perpetual inventory system.
Prepare journal entries on Insto's books to record the preceding information, including the adjusting entry at the end of the year and payment of the note at maturity. For a compound transaction, if an amount box does not require an entry, leave it blank or enter "0". Assume a 360-day year.