Question
A business issued a 120-day, 4% note for $260,000 to a creditor on account. Journalize the entries to record (a) the issuance of the note
A business issued a 120-day, 4% note for $260,000 to a creditor on account.
Journalize the entries to record (a) the issuance of the note and (b) the payment of the note at maturity, including interest. Assume a 360-day year and round amounts to the nearest whole dollar. Refer to the Chart of Accounts for exact wording of account titles.
a. Journalize the entry to record the issuance of the note on January 1. Refer to the Chart of Accounts for exact wording of account titles. Round amounts to the nearest whole dollar.
ACCOUNTING EQUATION
| DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |
|---|---|---|---|---|---|---|---|---|
| 1 |
|
|
|
|
|
|
|
|
| 2 |
|
|
|
|
|
|
|
|
b. Journalize the entry to record the payment of the note at maturity, including interest on May 1. Assume a 360-day year and round amounts to the nearest whole dollar. Refer to the Chart of Accounts for exact wording of account titles.
ACCOUNTING EQUATION
| DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |
|---|---|---|---|---|---|---|---|---|
| 1 |
|
|
|
|
|
|
|
|
| 2 |
|
|
|
|
|
|
|
|
| 3 |
|
|
|
|
|
|
|
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Principles of Accounting
Authors: Needles, Powers, crosson
11th Edition
1439037744, 978-1133626985, 978-1439037744
