Notes PayableRenchen Company, which manufactures steel tubing and casing for automobile production, borrowed $500,000 on January 1 to finance the purchase of a new piece of machinery with new heating technology. The terms of Renchen's note dictate that it is a 4-month, 9%, interest-bearing note.Required:  Hide  If an amount box does not require an entry, leave it blank.1.  Record the borrowing transaction.2.  Record the repayment transaction.      1. Jan. 1        (Record issuance of note payable)      2. May 1            (Record payment of interest and principal)

Question
Asked Oct 27, 2019

Notes Payable

Renchen Company, which manufactures steel tubing and casing for automobile production, borrowed $500,000 on January 1 to finance the purchase of a new piece of machinery with new heating technology. The terms of Renchen's note dictate that it is a 4-month, 9%, interest-bearing note.

Required:

 

  Hide    

If an amount box does not require an entry, leave it blank.
1.  Record the borrowing transaction.
2.  Record the repayment transaction.



 
 
       
1. Jan. 1
 
 
 
 
 
 
 
 
(Record issuance of note payable)
   
       
2. May 1
 
 
 
 
 
 
 
 
 
 
 
 
(Record payment of interest and principal)
   
       

 

 

 

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Step 1

1. prepare the journal entry to reco...

Debit (S) Credit ($)
500,000
Account Titles and Explanation
Date
1-Jan Cash
Notes payable
(To record issuance of notes payable)
500,000
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Debit (S) Credit ($) 500,000 Account Titles and Explanation Date 1-Jan Cash Notes payable (To record issuance of notes payable) 500,000

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