Blanton Plastics, a household plastic product manufacturer, borrowed $28 million cash on October 1, 2018, to provide working capital for year-end production. Blanton issued a four-month, 12% promissory note to L&T Bank under a prearranged short-term line of credit. Interest on the note was payable at maturity. Each firms fiscal period is the calendar year.

Required: 1.

Prepare the journal entries to record (a) the issuance of the note by Blanton Plastics and (b) L&T Banks receivable on October 1, 2018. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)

1-1 Record the issuance of the note by Blanton Plastics

1-2 Record the L&T Bank's receivable

2.Prepare the journal entries by both firms to record all subsequent events related to the note through January 31, 2019. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)

2-1 Record the adjusting entry for the Blanton Plastics, on December 31, 2018

2-2 Record the adjusting entry for the L & T Bank, on December 31, 2018

2-3 Record the maturity for the Blanton Plastics, on January, 31 2019

2-4 Record the maturity for the L & T Bank, on January, 31 2019

3.Suppose the face amount of the note was adjusted to include interest (a noninterest-bearing note) and 12% is the banks stated discount rate. (a)Prepare the journal entries to record the issuance of the noninterest-bearing note by Blanton Plastics on October 1, 2018, the adjusting entry at December 31, and payment of the note at maturity. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)

3-1 Record the issuance note, on October 01, 2018

3-2 Record the adjusting entry, on December 31, 2018

3-3 Record the interest expense, on January 31, 2019

3-4 Record payment of the note payable on January 31, 2019

(B) Suppose the face amount of the note was adjusted to include interest (a noninterest-bearing note) and 12% is the banks stated discount rate. (b) What would be the effective interest rate? (Do not round intermediate calculations and round your final answer to 1 decimal place.)

Annual effective rate? %