Learning Objective 3: Purchase inventory, accrue interest, and pay a short-termnote) On August 1, 2019, The Shoppes at Mill Lake, Inc., purchased inventory costing $40,000by signing a 6%, six-month, short-term note payable. The company will pay the entire note(principal and interest) on the note’s maturity date.Requirements1. Journalize the company’s purchase of inventory.2. Make the adjusting entry for accrual of interest on the note payable on December 31, 2019.3. At December 31, 2019, what is reported on the balance sheet related to this note payable?4. Record the payment of the note payable (principal and interest) on its maturity date

Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter6: Cost Of Goods Sold And Inventory
Section: Chapter Questions
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Learning Objective 3: Purchase inventory, accrue interest, and pay a short-term
note) On August 1, 2019, The Shoppes at Mill Lake, Inc., purchased inventory costing $40,000
by signing a 6%, six-month, short-term note payable. The company will pay the entire note
(principal and interest) on the note’s maturity date.
Requirements
1. Journalize the company’s purchase of inventory.
2. Make the adjusting entry for accrual of interest on the note payable on December 31, 2019.
3. At December 31, 2019, what is reported on the balance sheet related to this note payable?
4. Record the payment of the note payable (principal and interest) on its maturity date

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