Question
Asked Dec 17, 2019
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Bull City Industries is considering issuing a $100,000, 7% note to a creditor on account.
a. If the note is issued with a 45-day term, journalize the entries to record:
1. the issuance of the note.
2. the payment of the note at maturity.
b. If the note is issued with a 90-day term, journalize the entries to record:
1. the issuance of the note.
2. the payment of the note at maturity.

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a. Prepare the journal entry to record if the note ...

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Account title and explanation |Accounts payable Note payable |(To record the issuance of the note) Account title and explanation Note payable Interest expense |($100,000×7%x45÷360) Debit ($) Credit ($) Date (a)(1) 100,000 100,000 Debit ($) Credit ($) Date |(a)(2) 100,000 875 Cash 100,875 |(To record payment of note payable with interest)

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