Solve the below problem:
Q: Creating the Journal for the March transactions. I have a Journal written out but it doesn't seem right even though the Cr. and Dr. balance out. The second 3/1 transaction dealing with Notes Payable are confusing, don't know how to notate those in the journal; as well as the Additional Information section.
3/1 - Owners of OPJ invested an additional $55,000 cash into the business. The cash is put into Big Bank.
3/1 - Pay off the $40,000 Note Payable owed to Little Bank. The cash to pay off the note is taken out of Big Bank. Also pay to Little Bank $200 for interest owed on the Note Payable for February. The $200 cash is also taken out of Big Bank.
3/1 - Take $4,000 cash out of Big Bank to pay for March's rent.
3/2 - The customer that purchased on credit on February 15 pays $78,000 cash to pay off the amount due. The cash is deposited into Big Bank.
3/10 - Sale of inventory to a customer -- selling price is $65,000 -- cost of the inventory sold $12,000. The customer pays cash. The cash is deposited into Little Bank.
3/15 - Take $26,000 cash out of Little Bank to pay employees for wages they have earned.
3/16 - Purchase $70,000 of additional inventory. OPJ will pay the manufacturer 50% of the $70,000 in 10 days. OPJ will pay the remaining 50% in 30 days.
3/17 - Sale of inventory to a customer -- selling price $120,000 -- cost of the inventory sold $27,000. The customer will pay for the purchase in 30 days.
3/20 - Sale of inventoy to a customer -- selling price $70,000 -- cost of the inventory sold $14,000. The customer pays $15,000 cash that is deposited into Little Bank. The customer will pay the remaining amount in 30 days.
3/22 - Purchase inventory for $30,000 cash. The cash is taken out of Big Bank.
3/26 - Pay the manufacturer the 50% due on the March 16th purchase of inventory. The cash is taken out of Big Bank.
3/30 - Take $25,000 cash out of Little Bank to pay employees for wages they have earned
**Additional Information** Note Payable Big Bank: Interest due to Big Bank on the Note Payable for the month of March is $600. As of March 31st, OPJ owes Big Bank a total of $1,125 for interest ($525 for Feb. + $600 for March). Interest will be paid to Big Bank in June.
Chart Accounts:
100 Cash - Big Bank
105 Cash - Little Bank
110 Accounts Receivable
120 Inventory
150 Equipment
Liabilities:
200 Accounts Payable
210 Note Payable - Big Bank
215 Note Payable - Little Bank
220 Interest Payable - Big Bank
225 Interest Payable - Little Bank
Equity:
300 Common Stock
305 Retained Earnings
Revenues:
400 Sales Revenue
Expenses:
500 Cost of Goods Sold
510 Rent Expense
515 Wages Expense
520 Interest Expense