During 2014, Aubergine Co. borrowed cash from Chartreuse Company by issuing notes payable as follows:
1. July 1, 2014, issued an eight-month, 4% note for $75,000. Interest and principal are payable at maturity.
2. November 1, 2014, issued a three-month, 5% note for $42,000. Interest is payable monthly on the first day of the month. Principal is payable at maturity.
Aubergine has a December 31 fiscal year end and prepares adjusting entries on an annual basis.
Instructions
Prepare all necessary journal entries for Aubergine in 2014 and 2015 regarding the notes and interest including adjusting entries. Prepare separate adjusting entries for each note.