BE9.2

Prepare entries for an interest-bearing note payable. LO2 Admiralty Pty Ltd borrows $160 000 on 1 July from the bank by signing a $160 000, 10%, 1-year note payable. Prepare the journal entries to record (a) the proceeds of the note and (b) accrued interest at 31 December, assuming adjusting entries are made only at the end of the year (31 December).