CP 96

On November 1, 2019 Branch Corporation converted a $10,000 account payable owing to Tree Corp. to a note payable bearing interest at 10% per year due on January 31, 2020.

Required:

1. Record the November 1, 2019 transaction in the records of Branch.

2. Record the adjusting entry needed on December 31, 2019.

3. Record the journal entry for the January 31 payment.

4. Record the above journal entries in the records of Tree Corp.

Provide descriptions for journal entries.