Asked Dec 17, 2019

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.


Expert Answer

Step 1

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


Image Transcriptionclose

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)


Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in



Related Accounting Q&A

Find answers to questions asked by student like you
Show more Q&A

Q: “What has been regarded as normal spoilage in the past is not necessarily acceptable as normal spoil...

A: Spoilage:Spoilage is the defective item at intermediate or final stage. The spoilage goods cannot be...


Q: The cash account for Collegiate Sports Co. on November 1 indicated a balance of $81,145. During Nove...

A: 1. Prepare the bank reconciliation statement of Company CS as at November 30.


Q: Help

A: 1. Compute depreciation for each year using straight line method as shown below:


Q: At the end of the current year, Accounts Receivable has a balance of $3,460,000, Allowance for Doubt...

A: Accounts receivable Accounts receivable refers to the amounts to be received within a short period f...


Q: Motorcycle Manufacturers, Inc., projected sales of 59,700 machines for the year. The estimated Janua...

A: Prepare a production budget for the year:


Q: What is a deferred revenue? Provide an example.

A: Deferred revenue: Deferred revenues are revenues related to more than one period.  A deferred revenu...


Q: How does retained earnings increase? What are the two ways that retained earnings decrease?

A: Retained earnings get increased if company generates net income.Retained earnings get decrease if th...


Q: Identify the main difference between journal entries in process costing and job costing.

A: Process Costing: Process costing is a tool used to ascertain the cost incurred by the business at ea...


Q: Analyzing and journalizing transactions As the manager of Margarita Mexican Restaurant, you must dea...

A: Analysis of transactions: A transaction refers to any business event that affects assets, liabilitie...