The following transactions occurred during 2021 for the Beehive Honey Corporation: Feb. 1 Borrowed $24,000 from a bank and signed a note. Principal and interest at 8% will be paid on January 31, 2022.
Apr. 1 Paid $6,000 to an insurance company for a two-year fire insurance policy.
July 17 Purchased supplies costing $4,000 on account. The company records supplies purchased in an asset account. At the year-end on December 31, 2021, supplies costing $1,850 remained on hand.
Nov. 1 A customer borrowed $9,600 and signed a note requiring the customer to pay principal and 6% interest on April 30, 2022.
Required:
1. Record each transaction in general journal form.
2. Prepare any necessary adjusting entries at the year-end on December 31, 2021. No adjusting entries were recorded during the year for any item.

Given Below

Explanation:

Beehive Honey Corporation:

General Journal

Journal Entries

Date                  Particulars                  Debit                Credit

Feb.1.                    Cash                      $ 24,000 Dr.

                                 Notes Payable                          $ 24,000 Cr.

Feb. 1 Borrowed $24,000 from a bank and signed a note. Principal and interest at 8% will be paid on January 31, 2022.

Apr. 1             Prepaid Insurance       6,000 Dr.

                             Cash                                               $ 6000 Cr

Apr. 1 Paid $6,000 to an insurance company for a two-year fire insurance policy.

July 17        Supplies Account        $ 4000  Dr.

                              Accounts Payable                    $ 4000 Cr.

July 17 Purchased supplies costing $4,000 on account. The company records supplies purchased in an asset account.

Nov. 1          Notes Receivable     $ 9,600 Dr.

                             Cash                                         $ 9,600 Cr.

Nov. 1 A customer borrowed $9,600 and signed a note requiring the customer to pay principal and 6% interest on April 30, 2022.

Beehive Honey Corporation:

General Journal

Adjusting Entries December 31st

Sr. No              Particulars                  Debit                Credit

1.                  Interest Expense      $ 1600 Dr.

                             Interest Payable                       $ 1600 Cr.

Interest accrued from Feb to December. ( $ 24000* 8% * 10/12 =  $ 1600)

2.                      Insurance Expense $ 2250 Dr.

                                  Prepaid Insurance                  2250 Cr.

Insurance of $ 2250 expired during April to December. ( $ 3000 *9/12* = $ 2250)

3.                    Supplies Expense $ 2150 Dr.

                           Supplies Account                      $ 2150 Cr.

( $ 4000 - $ 1850= $ 2150)

At the year-end on December 31, 2021, supplies costing $1,850 remained on hand.

4.                    Interest Receivable     $ 192 Dr.

                          Interest Income                            $ 192 Cr.

$9,600 * 6% * 2/6= $ 192 Accrued Interest not yet received.

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