The following selected transactions relate to liabilities of United Insulation Corporation. United’s fiscal year ends on December 31. 2021Jan. 13 Negotiated a revolving credit agreement with Parish Bank that can be renewed annually upon bank approval. The amount available under the line of credit is $20 million at the bank’s prime rate.Feb. 1 Arranged a three-month bank loan of $5 million with Parish Bank under the line of credit agreement. Interest at the prime rate of 10% was payable at maturity.May 1 Paid the 10% note at maturity.Dec. 1 Supported by the credit line, issued $10 million of commercial paper on a nine-month note. Interest was discounted at issuance at a 9% discount rate. 31 Recorded any necessary adjusting entry(s).2022Sept. 1 Paid the commercial paper at maturity. Required:Prepare the appropriate journal entries through the maturity of each liability. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)

Solution:- Preparation of appropriate journal entries through the maturity of each liability as…

Answered: The following selected transactions…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 30E

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The following selected transactions relate to liabilities of United Insulation Corporation. United’s fiscal year ends on December 31.

2021

Jan.	13	Negotiated a revolving credit agreement with Parish Bank that can be renewed annually upon bank approval. The amount available under the line of credit is $20 million at the bank’s prime rate.
Feb.	1	Arranged a three-month bank loan of $5 million with Parish Bank under the line of credit agreement. Interest at the prime rate of 10% was payable at maturity.
May	1	Paid the 10% note at maturity.
Dec.	1	Supported by the credit line, issued $10 million of commercial paper on a nine-month note. Interest was discounted at issuance at a 9% discount rate.
	31	Recorded any necessary adjusting entry(s).

2022

Sept.

Paid the commercial paper at maturity.

Required:
Prepare the appropriate journal entries through the maturity of each liability. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)

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