On September 1, 2018, Packaging Company. Borrowed OR 1,200,000 cash from Bank Muscat. The company issued a seven month, 10% promissory note. Interest was payable at maturity. The packaging financial period is the calendar year. Required: 1. Prepare the journal entry for the issuance of the note by the Packaging Company. 2. Prepare the appropriate adjusting entry for the note to record on December 31, 2018, by Packaging. 3. Prepare the journal entry for the payment of the note at maturity.
On September 1, 2018, Packaging Company. Borrowed OR 1,200,000 cash from Bank Muscat. The company issued a seven month, 10% promissory note. Interest was payable at maturity. The packaging financial period is the calendar year.
Required:
1. Prepare the
2. Prepare the appropriate
3. Prepare the journal entry for the payment of the note at maturity.
The Notes payable or Accounts payable is a liability in which the borrower records a written promise to repay the lender. It is a written agreement in which one party agrees to pay the other party after a certain time period which is known as the maturity period.
| Date | Particulars | L/F | Debit | Credit |
| Sept. 1, 2018 |
Cash A/C Dr. To Notes Payable A/C (being notes payable issued and loan amount received by the Packaging Company) |
1,200,000
|
1,200,000
|
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