Augustine Corporation borrowed $150,000 from the J.P Morgan Chase Bank on June 1, 2019, on a 3-year, 6.4% note. Interest is paid annually on May 31.
Required:
1. Record the borrowing transaction in Augustine's journal.
2. Prepare the adjusting entries made at December 31, 2019 and 2020.
3. Prepare the necessary journal entry to recognize the first interest payment on May 31, 2020.
4. Indicate how the note and associated interest would be presented in Augustine's December 31, 2020 balance sheet.
5. Prepare the necessary journal entries to record the repayment of the note and the last year's interest payment on May 31, 2022.