Exercise 10-1 (Part Level Submission)

Kelly Jones and Tami Crawford borrowed $15,000on a7-month,8% note from Gem State Bank to open their business, JC's Coffee House. The money was borrowed on June 1, 2017, and the note matures January 1, 2018.

(a)

Your answer is correct.

Prepare the entry to record the receipt of the funds from the loan.(Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date

Account Titles and Explanation

Debit

Credit

June 1

(b)

Prepare the entry to accrue the interest on June 30.

Date

Account Titles and Explanation

Debit Credit

June 30

(c)

Assuming adjusting entries are made at the end of each month, determine the balance in the interest payable account at December 31, 2017.

Balance in interest payable account $