On August 1, 2015, Trico Technologies, an aeronautic electronics company, borrows $21 million cash to expand operations The loan is made by FirstBanc Corp under a short term line of credit arrangement Trico signs a six month, 9 promissory note Interest is payable at maturity Tricos year end is Dece...

1 August 1 2015 Debit Credit Cash 21000000 Notes Payable 21000000 Issuance of no ...

On August 1, 2015, Trico Technologies, an aeronautic electronics company, borrows $21 million cash to expand operations.

Question:

On August 1, 2015, Trico Technologies, an aeronautic electronics company, borrows $21 million cash to expand operations. The loan is made by FirstBanc Corp. under a short-term arrangement. Trico signs a six-month, 9% promissory note. Interest is payable at maturity. Trico’s year-end is December 31.

Required:
1. Record the issuance of the note by Trico Technologies.
2. Record the appropriate adjustment for the note by Trico on December 31, 2015.
3. Record the payment of the note by Trico at maturity.

Line of Credit
A line of credit (LOC) is a preset borrowing limit that can be used at any time. The borrower can take money out as needed until the limit is reached, and as money is repaid, it can be borrowed again in the case of an open line of credit. A LOC is...