Trade Notes Payable. On November 1, Barcelona Sales, Inc. purchased inventory costing $589,000 using a 5-month trade note payable. The note carries an annual interest rate of 10%. Barcelona has a December 31 year-end. The company uses a perpetual inventory system.
Required
- a. What is interest expense during the current year? What is the interest expense the following year?
- b. Prepare all required
journal entries.
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