Ellsworth Enterprises borrowed $425,000 on an 8%, interest-bearing note on September 30, 2020. Ellsworth ends its fiscal year on December 31. The note was paid with interest on March 31, 2021.
Required:
1. Prepare the entry for this note on September 30, 2020.
2. Prepare the adjusting entry for this note on December 31, 2020.
3. Indicate how the note and the accrued interest would appear on the balance sheet at December 31, 2020.
4. Prepare the entry to record the repayment of the note on March 31, 2021.