Described below are certain transactions of Beacon Company for 2004: a)On May 10, the company purchased goods from Jay Company for $90,000, terms 2/10, n/30. Purchases and accounts payable are recorded at net amounts. The invoice was paid on May 18. b)On June 1, the company purchased equipment for $120,000 from Nolan Company, paying $40,000 in cash and giving a one-year, 9% note for the balance. c)On September 30, the company discounted at 10% its $240,000, one-year zero-interest-bearing note at First State Bank. Instructions (a)Prepare the journal entries necessary to record the transactions above using appropriate dates. (b)Prepare the adjusting entries necessary at December 31, 2004 in order to properly report interest expense related to the above transactions. Assume straight-line amortization of discounts. (c)Indicate how the above transactions should be reflected in the Current Liabilities section of Beacon Company's December 31, 2004 balance sheet.
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