On June 1, Avery Company Ltd. borrows $50,000 from First Bank on a 6-month, $50,000, 9% note.

Question:

On June 1, Avery Company Ltd. borrows $50,000 from First Bank on a 6-month,

$50,000, 9% note. The note matures on December 1.

Instructions

(a) Prepare the entry on June 1.

(b) Prepare the adjusting entry on June 30.

(c) Prepare the entry at maturity (December 1), assuming monthly adjusting entries have been made through November 30.

(d) What was the total financing cost (interest expense)?

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Financial Accounting Tools For Business Decision Making

ISBN: 9780471730514

4th Edition

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso

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Question Posted: Jul 05, 2024 10:10 AM

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On June 1, Avery Company Ltd. borrows $50,000 from First Bank on a 6-month, $50,000, 9% note.

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Financial Accounting Tools For Business Decision Making

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