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Adjusting Entries for Interest At December 31, 2014, Portland Corporation had two notes payable outstanding (notes 1 and 2). At December 31, 2015, Portland also

Adjusting Entries for Interest At December 31, 2014, Portland Corporation had two notes payable outstanding (notes 1 and 2). At December 31, 2015, Portland also had two notes payable outstanding (notes 3 and 4). These notes are described below.

Date of note Principal Amount Interest Rate Number of Days
December 31, 2014
Note 1 11/25/2014 $35,000 8% 90
Note 2 12/16/2014 16,800 9 60
December 31, 2015
Note 3 12/11/2015 15,400 9 120
Note 4 12/7/2015 18,000 12 90

Required a. Prepare the adjusting entries for interest at December 31, 2014. b. Assume that the adjusting entries were made at December 31, 2014, and that no adjusting entries were made during 2015. Prepare the 2015 journal entries to record payment of the notes that were outstanding at December 31, 2014. c. Prepare the adjusting entries for interest at December 31, 2015. Round answers to nearest dollar. Use 360 days for interest calculations when applicable.

General Journal
Date Description Debit Credit
a.
Dec.31 AnswerNotes PayableInterest PayableInterest ExpenseCash $Answer $Answer
AnswerNotes PayableInterest PayableInterest ExpenseCash Answer Answer
To record interest on note 1.
Dec.31 AnswerNotes PayableInterest PayableInterest ExpenseCash Answer Answer
AnswerNotes PayableInterest PayableInterest ExpenseCash Answer Answer
To accrue interest on note 2.
b.
Feb.14 Notes Payable Answer Answer
AnswerNotes PayableInterest PayableInterest ExpenseCash Answer Answer
Interest Expense Answer Answer
AnswerNotes PayableInterest PayableInterest ExpenseCash Answer Answer
To record payment of Note 2.
Feb.23 Notes Payable Answer Answer
AnswerNotes PayableInterest PayableInterest ExpenseCash Answer Answer
Interest Expense Answer Answer
AnswerNotes PayableInterest PayableInterest ExpenseCash Answer Answer
To record payment of Note 1.
c.
Dec.31 AnswerNotes PayableInterest PayableInterest ExpenseCash Answer Answer
AnswerNotes PayableInterest PayableInterest ExpenseCash Answer Answer
To record interest on Note 3.
Dec.31 AnswerNotes PayableInterest PayableInterest ExpenseCash Answer Answer
AnswerNotes PayableInterest PayableInterest ExpenseCash Answer Answer
To record interest on Note 4.

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