1 answer

E bottom of the question box as your submitted answer to that tion. Question 2 22...

Question:

e bottom of the question box as your submitted answer to that tion. Question 2 22 pts On October 1, 2015, Newco borrowed $200
e bottom of the question box as your submitted answer to that tion. Question 2 22 pts On October 1, 2015, Newco borrowed $200,000 from First National Bank, and signed a 12% note payable due in one year. Interest on the note is due at maturity. Required: Please show calculations Part a. Prepare the journal entry to record the borrowing transaction. Part b. Prepare the required adjusting entry on December 31, 2015. Part c. Prepare the journal entry to record the payment of the interest on October 1, 2016. Part d. Prepare the journal entry to record the payment of the note on October 1, 2016.

Answers

Newco
Journal entries
Date Account Debit Credit Calculation
Part a 1-Oct-15 Cash $   200,000
Notes Payable $   200,000
Part b 31-Dec-15 Interest expense $        6,000 =200,000*12%*3/12
Interest Payable $        6,000
Part c 1-Oct-16 Interest Payable $        6,000 From above entry
Interest expense $     18,000 =200,000*12%*9/12
Cash $     24,000
Part d 1-Oct-16 Notes Payable $   200,000
Cash $   200,000
.

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