Incubate Co. produces advertising videos. During the last six months of the current fiscal year, Incubate Co. received the following notes.

Instructions
1. Determine for each note (a) the due date and (b) the amount of interest due at maturity, identifying each note by number.
2. Journalize the entry to record the dishonor of Note (3) on its due date.
3. Journalize the adjusting entry to record the accrued interest on Notes (5) and (6) on December 31.
4. Journalize the entries to record the receipt of the amounts due on Notes (5) and (6) in January andFebruary.

Transcribed Image Text:

Interest Rate Face Date Amount Term 1. May 23 2. July 10 3. Aug. 8 4. Sept. 16 5. Nov. 23 6. Dec. 18 18,000 20,000 36,000 20,000 18,000 48,000 45 days 60 days 90 days 90 days 60 days 60 days 9% 6% 7% 12%