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At December 3 1 of Year 1 , Portland Corporation had two notes payable outstanding ( notes 1 and 2 ) . At December 3

At December 31 of Year 1, Portland Corporation had two notes payable outstanding (notes 1 and 2). At December 31 of Year 2, 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, Year 1
Note 1 November 25, Year 1 $27,0008%90
Note 2 December 16, Year 116,8009%60
December 31, Year 2
Note 3 December 11, Year 215,4009%120
Note 4 December 07, Year 218,00010%90
Required
a. Prepare the adjusting entries for interest at December 31 of Year 1.
b. Assume that the adjusting entries were made at December 31 of Year 1, and that no adjusting entries were made during Year 2. Prepare the Year 2 journal entries to record payment of the notes that were outstanding at December 31 of Year 1.
c. Prepare the adjusting entries for interest at December 31 of Year 2.
Round answers to nearest dollar. Use 360 days for interest calculations when applicable.
General Journal
Date Description Debit Credit
a.
Dec.31 Answer
Answer
0
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0
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To record interest on note 1.
Dec.31 Answer
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0
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To accrue interest on note 2.
b.
Feb.14 Notes Payable Answer
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0
Interest Expense Answer
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To record payment of Note 2.
Feb.23 Notes Payable Answer
0
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0
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0
Interest Expense Answer
0
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To record payment of Note 1.
c.
Dec.31 Answer
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To record interest on Note 3.
Dec.31 Answer
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To record interest on Note 4.

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