Kelly Jones and Tami Crawford borrowed $30,000 on a 7-month, 9% note from Gem State Bank to open their business, Crane’s Coffee House. The money was borrowed on June 1, 2022, and the note matures January 1, 2023. Correct answer iconYour answer is correct.Prepare the entry to record the receipt of the funds from the loan. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)DateAccount Titles and ExplanationDebitCreditJune 1enter an account title to record the receipt of the funds from the loan on June 1enter a debit amountenter a credit amount enter an account title to record the receipt of the funds from the loan on June 1enter a debit amountenter a credit amount eTextbook and MediaList of Accounts   Partially correct answer iconYour answer is partially correct.Prepare the entry to accrue the interest on June 30. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)DateAccount Titles and ExplanationDebitCreditJune 30enter an account title to accrue the interest on June 30enter a debit amountenter a credit amount enter an account title to accrue the interest on June 30enter a debit amountenter a credit amount eTextbook and MediaList of Accounts   Correct answer iconYour answer is correct.Assuming adjusting entries are made at the end of each month, determine the balance in the Interest Payable account at December 31, 2022.Balance in interest payable account $enter the Balance in interest payable account in dollars  eTextbook and MediaList of Accounts   Incorrect answer iconYour answer is incorrect.Prepare the entry required on January 1, 2023, when the loan is paid back. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)DateAccount Titles and ExplanationDebitCreditJan. 1, 2023enter an account title on January 1enter a debit amountenter a credit amount enter an account title on January 1enter a debit amountenter a credit amount

Question
Asked Dec 8, 2019
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Kelly Jones and Tami Crawford borrowed $30,000 on a 7-month, 9% note from Gem State Bank to open their business, Crane’s Coffee House. The money was borrowed on June 1, 2022, and the note matures January 1, 2023.
 

Correct answer iconYour answer is correct.

Prepare the entry to record the receipt of the funds from the loan. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date
Account Titles and Explanation
Debit
Credit
June 1
enter an account title to record the receipt of the funds from the loan on June 1
enter a debit amount
enter a credit amount
 
enter an account title to record the receipt of the funds from the loan on June 1
enter a debit amount
enter a credit amount
 

eTextbook and Media

List of Accounts

 
 
 

Partially correct answer iconYour answer is partially correct.

Prepare the entry to accrue the interest on June 30. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date
Account Titles and Explanation
Debit
Credit
June 30
enter an account title to accrue the interest on June 30
enter a debit amount
enter a credit amount
 
enter an account title to accrue the interest on June 30
enter a debit amount
enter a credit amount
 

eTextbook and Media

List of Accounts

 
 
 

Correct answer iconYour answer is correct.

Assuming adjusting entries are made at the end of each month, determine the balance in the Interest Payable account at December 31, 2022.

Balance in interest payable account   $enter the Balance in interest payable account in dollars 
 

eTextbook and Media

List of Accounts

 
 
 

Incorrect answer iconYour answer is incorrect.

Prepare the entry required on January 1, 2023, when the loan is paid back. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date
Account Titles and Explanation
Debit
Credit
Jan. 1, 2023
enter an account title on January 1
enter a debit amount
enter a credit amount
 
enter an account title on January 1
enter a debit amount
enter a credit amount
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Expert Answer

Step 1
  1. Prepare journal entry to record the receipt of the funds from the loan:
help_outline

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Post Debit Credit (S) Account Titles and Description Date Ref. (S) $30,000 June 1 Cash Notes payable (To record the receipt of the |funds from the loan) $30,000

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Step 2

2. Prepare journal entry to record the accrued interest:

help_outline

Image Transcriptionclose

Post Debit Account Titles and Description Credit (S) Date Ref. (S) $225 June 30 Interest expense [(S30,000x9%)÷12] Interest payable $225 (To record the accrued interest)

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Step 3

3. Ascertain the balance in the Interest Payable a...

help_outline

Image Transcriptionclose

Balance in interest = Interest expensex Number of months payable account = $225 x9 = $2.025

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