My text book is  Hospitality Industry Financial Accounting (4th edition). I am in chapter 9 -- RECEIVABLES AND PAYABLES now. There is a question asks for journalize the transactions for this note payable.The scenario is the following:In 20X8 and 20X9, Dorothy's Restaurant made the following transactions:1. On July 1, 20X8, Dorothy's Restaurant borrowed $20,000 from the Kansas Bank at 12 percent interest for nine months.2. On December 31, 20X8, it accrued interest on the note.3. On April 1, 20X9, it repaid the loan to Kansas Bank, including interest.

Question
Asked Oct 21, 2019

My text book is  Hospitality Industry Financial Accounting (4th edition). I am in chapter 9 -- RECEIVABLES AND PAYABLES now. 

There is a question asks for journalize the transactions for this note payable.

The scenario is the following:

In 20X8 and 20X9, Dorothy's Restaurant made the following transactions:

1. On July 1, 20X8, Dorothy's Restaurant borrowed $20,000 from the Kansas Bank at 12 percent interest for nine months.

2. On December 31, 20X8, it accrued interest on the note.

3. On April 1, 20X9, it repaid the loan to Kansas Bank, including interest.

check_circleExpert Solution
Step 1

Account receivable: The amount of money to be received by a company for the sale of goods and services to the customers, is referred to as account receivable.

Step 2

1. Prepare journal entry for the amount borrowed from bank during 20X8:

Debit (S)
Credit (S)
Account Title and Explanation
Cash
Date
July 1, 20X8
20,000
Note payable
20,000
(To record the amount borrowed from
Вank K)
help_outline

Image Transcriptionclose

Debit (S) Credit (S) Account Title and Explanation Cash Date July 1, 20X8 20,000 Note payable 20,000 (To record the amount borrowed from Вank K)

fullscreen
Step 3

2. Prepare journal entry for the interest accrue...

Debit (S)
Credit (S)
Account Title and Explanation
Date
December 31,
Interest expense
$1,200
20X8
Interest payable
(To record the interest accrued)
$1,200
help_outline

Image Transcriptionclose

Debit (S) Credit (S) Account Title and Explanation Date December 31, Interest expense $1,200 20X8 Interest payable (To record the interest accrued) $1,200

fullscreen

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

Business

Accounting

Related Accounting Q&A

Find answers to questions asked by student like you

Show more Q&A add
question_answer

Q: Accounting Question

A: Formula to calculate receivable turnover ratio: Receivable turnover ratio for two years is calculate...

question_answer

Q: Journal entries for a-d

A: Notes Receivable are the assets which may or may not carry interest and are redeemable after a perio...

question_answer

Q: Dunng its Secand and third qvarters OF Fiscal 20 14, Rasbery inc wrote cown s BB lo Smrtphone invent...

A: Click to see the answer

question_answer

Q: Delete Insert 41. The following accounts, in alphabetical order, are from the general ledger of Oma ...

A: Trial balance refers to one of the financial statement which is prepared to determine whether matchi...

question_answer

Q: 46. Use Oma Bean Corporation's adjusted trial balance to prepare the company's income statement. OMA...

A: There are various types of financial statement which are prepared by an organization.  One of them i...

question_answer

Q: What role does the audit trail play in terms of configaration?

A: Audit trail is a series of documents, files or other evidence of accounting transaction which are ex...

question_answer

Q: On January 1, Wei company begins the accounting period with a $30,000 credit balance in allowance fo...

A: a.Prepare the journal entry to write off the two specified accounts.

question_answer

Q: 2014 2013 Cash         442,500 195,000 Accounts Receivable      450,000 462,500 Investments   ...

A: Prepare statement of cash flows:

question_answer

Q: How would I work this problem?

A: Break-even point is a no loss no profit point for the company. Break even units of sales is that tot...