1. Answer what is required of the problem. Ontario Company, a natural energy supplier, borrowedP8,000,000 cash on November 1, 2021 to fund a geologicalsurvey. The loan was granted by United Bank undershort-term credit line. Ontario Company issued a 9-month12% promissory note with interest payable at maturity. Thefiscal period is the calendar year.Required:1. Prepare the journal entry for the issuance of the notepayable by Ontario Company.2. Prepare the appropriate adjusting entry for the notepayable on December 31, 2021.3. Prepare the journal entry for the payment of the notepayable at maturity.

The journal entries are given as,

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EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 16P

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Question

1. Answer what is required of the problem.

Ontario Company, a natural energy supplier, borrowed
P8,000,000 cash on November 1, 2021 to fund a geological
survey. The loan was granted by United Bank under
short-term credit line. Ontario Company issued a 9-month
12% promissory note with interest payable at maturity. The
fiscal period is the calendar year.
Required:
1. Prepare the journal entry for the issuance of the note
payable by Ontario Company.
2. Prepare the appropriate adjusting entry for the note
payable on December 31, 2021.
3. Prepare the journal entry for the payment of the note
payable at maturity.

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