Jim Eakins and Tom Zedek borrowed $15,000 on an 8-month, 8% note from Garden State Bank to
Question:
Jim Eakins and Tom Zedek borrowed $15,000 on an 8-month, 8% note from Garden State Bank to open their business, EZ’s Coffee House. The money was borrowed on May 1, 2001.
Instructions
(a) Prepare the entry to record the receipt of the funds from the loan.
(b) Prepare the entry to accrue the interest on May 31.
(c) Assuming adjusting entries are made at the end of each month, determine the balance relating to this note in the interest payable account at December 31, 2001.
(d) Prepare the entry required on January 1, 2002, when the loan is paid back.
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Related Book For 
Financial Accounting Tools For Business Decision Making
ISBN: 9780471347743
2nd Edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
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