Assume that Githurai national bank agrees to lend $100000 on march 1, 2002 to Rock co. if Rocky co. signs a $100000, 12%,4-month note. with an interest-bearing note, the amount of assets received upon issuance of the note generally equals the note's face value.

i. record journal entries that Rock co. will make

interest accrues over the life of the note and must be recorded periodically. if Rock co. prepares financial statements semi-annually, an adjusting entry id required at June 30, to recognize interest expense and interest payable of $4000 ($ 100000*12%*4/12)

I. make an adjusting entry for this transaction

ii. make entry at maturity