Exercise 12.5 (Algo) Recording adjustments for prepaid interest. LO 12-2 On December 1, 20X1, Jim's Java Joint borrowed $32,000 from its bank in order to expand its operations. The firm issued a four- month, 6 percent note for $32,000 to the bank and received $31,360 in cash because the bank deducted the interest for the entire period in advance. In general journal form, show the entry that would be made to record this transaction and the adjustment for prepaid interest that should be recorded on the firm's worksheet for the year ended December 31, 20X1. View transaction list Journal entry worksheet 1 2 Record the borrowing. Note: Enter debits before credits. Datel Dec 1, 20X1 General Journal Debit Credit Exercise 12.5 (Algo) Recording adjustments for prepaid interest. LO 12-2 On December 1, 20X1, Jim's Java Joint borrowed $32,000 from its bank in order to expand its operations. The firm issued a four- month, 6 percent note for $32,000 to the bank and received $31,360 in cash because the bank deducted the interest for the entire period in advance. In general journal form, show the entry that would be made to record this transaction and the adjustment for prepaid interest that should be recorded on the firm's worksheet for the year ended December 31, 20X1. View transaction list Journal entry worksheet < 1 2 Record an adjusting entry for interest. Note: Enter debits before credits. Date Dec 31, 20X1 General Journal Debit Credit Stoud