Lazur Corporation, whose fiscal year ended June 30, 2011, completed the following transactions involving notes payable:

May 21 Obtained a 60-day extension on a $9,000 trade account payable owed to a supplier by signing a 60-day, $9,000 note. Interest is in addition to the face value, at the rate of 14 percent.

June 30 Made the end-of-year adjusting entry to accrue interest expense.

July 20 Paid off the note plus interest due the supplier.

REQUIRED

1. Prepare journal entries for the note’s payable transactions.

2. When notes payable appears on the balance sheet, what other current liability would you expect to be associated with the notes? What would it mean if this other current liability did not appear?