Entries for and Financial Statement Presentation of a Note}

Perez Company borrowed \(\$ 100,000\) from the National Bank on April 1, 2018, on a three-year, \(7.8 \%\) note. Interest is paid annually on April 1.

\section*{Required:}

1. Record the borrowing transaction in Perez's journal.

2. Prepare the adjusting entries made at December 31, 2018 and 2019.

3. Prepare the necessary journal entry to recognize the first interest payment on April 1, 2019.

4. Indicate how the note and associated interest would be presented on Perez's December 31, 2019, statement of financial position.

5. Prepare the necessary journal entries to record the repayment of the note and the last year's interest payment on April 1, 2021.

\section*{Required:}
Prepare the current liabilities and long-term debt portions of Fridley's statement of financial position at December 31, 2018. Provide a separate line item for each issue (do not combine separate bonds or notes payable), but some items may need to be split into more than one item.
\section*{Problem