On January 1, a company borrowed $3,000 from the bank by signing a 12%, 3-month note payable. The amount borrowed plus accrued interest is due on April 1. Make journal entries to record the following transactions: a) Issuance of the note payable on January 1 b) Repayment of the note on April 1 Use the same facts given in question 12 above, except assume that the company borrowed the money on November 1 (not Jan. 1) and will repay the note on February 1 of the next year. A.) What adjusting entry should the company make on December 31 to record accrued interest on the note? b) What journal entry should be made on February 1 when the company repays the note?
On January 1, a company borrowed $3,000 from the bank by signing a 12%, 3-month note payable. The amount borrowed plus accrued interest is due on April 1. Make journal entries to record the following transactions: a) Issuance of the note payable on January 1 b) Repayment of the note on April 1 Use the same facts given in question 12 above, except assume that the company borrowed the money on November 1 (not Jan. 1) and will repay the note on February 1 of the next year. A.) What adjusting entry should the company make on December 31 to record accrued interest on the note? b) What journal entry should be made on February 1 when the company repays the note?
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter14: Long-term Liabilities: Bonds And Notes
Section: Chapter Questions
Problem 11E
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On January 1, a company borrowed $3,000 from the bank by signing a 12%, 3-month note payable. The amount borrowed plus accrued interest is due on April 1. Make journal entries
to record the following transactions:
a) Issuance of the note payable on January 1
b) Repayment of the note on April 1
Use the same facts given in question 12 above, except assume that the company borrowed the money on November 1 (not Jan. 1) and will repay the note on February 1 of the next
year.
A.) What adjusting entry should the company make on December 31 to record accrued
interest on the note?
b) What journal entry should be made on February 1 when the company repays the note?
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