On November 1, 2013, Quantum Technology, a geothermal energy supplier, borrowed $16 million cash to fund a

Question:

On November 1, 2013, Quantum Technology, a geothermal energy supplier, borrowed $16 million cash to fund a geological survey. The loan was made by Nevada BancCorp under a noncommitted short-term arrangement. Quantum issued a nine-month, 12% promissory note. Interest was payable at maturity. Quantum's fiscal period is the calendar year.

Required:
1. Prepare the journal entry for the issuance of the note by Quantum Technology.
2. Prepare the appropriate adjusting entry for the note by Quantum on December 31, 2013.
3. Prepare the journal entry for the payment of the note 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...