A manufacturing company borrowed $200 on October 1 via a 6-month note that charges interest at an annual rate of 4%. The principal and interest are due March 31 of the following year. Use the table below to record the financial statement effects related to recording interest expense on Dec. 31 and closing out the loan on March 31.

• Ignore taxes
• 
  
• Use separate lines for the purchase and recording of interest expense and payment of the loan + interest as indicated

Transaction/Event	Cash	Note Payable	Interest Payable	Operating Cash Flows	Financing Cash Flows	Interest Expense	Pre-tax (net) Income
Record Interest Expense (Dec. 31)
Pay loan & Interest (March 31)