Brief Exercise 13-2Blossom Company borrowed $24,000 on November 1, 2017, by signing a $24,000, 10%, 3-month note. Prepare Blossom’s November 1, 2017, entry; the December 31, 2017, annual adjusting entry; and the February 1, 2018, entry. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)DateAccount Titles and ExplanationDebitCredit      2/1/18

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Asked Apr 25, 2019
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Brief Exercise 13-2
Blossom Company borrowed $24,000 on November 1, 2017, by signing a $24,000, 10%, 3-month note. Prepare Blossom’s November 1, 2017, entry; the December 31, 2017, annual adjusting entry; and the February 1, 2018, entry. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date
Account Titles and Explanation
Debit
Credit

 

 

 

 

 

 


2/1/18

 

 

 

 

 

 

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Step 1

Calculating the value of interest on the note payable at due date. We have,

The value of interest = Amount of borrowed x Interest rate x Time Period of loan

The value of interest = $ 24,000 x 10.00 % x 3/12

The value of interest = $ 600

...

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