ENTRIES FOR, AND FINANCIAL STATEMENT PRESENTATION OF A NOTE.

Perez Company borrowed $60,000 from the First National Bank on April 1, 19x6, on a 3-year, 8.7% note. Interest is paid annually on March 31.

REQUIRED:

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

2. Prepare the adjustments for 19x6 and 19x7.

3. Prepare the entry to recognize 19x7 interest to date and the first interest payment on March 31, 19x7.

4. Indicate how the note and associated interest would be presented in Perez’s December 31, 19x7, balance sheet.

5. Prepare the entry to record the repayment of the note and the last year’s interest on March 31, 19x9.