Accounts and Notes Payable

The following are selected 2019 transactions of Ortman Company.

Nov 1 Purchased inventory on account for $400,000 from Seller Company. Ortman uses the perpetual inventory method.

Dec 1 Issued a $400,000, 9-month, 9% note payable to Seller Company in payment of the November 1 account payable.

Dec 1 Borrowed $300,000 from Second National Bank by signing a 12-month, zero-interest bearing $276,000 note payable.

Instructions:

(a) Prepare journal entries for each of the transactions above.

(b) Prepare adjusting entries at December 31, 2019, for the transactions above.