Griddley Company borrowed $71,000 from the East Salvador Bank on February 1, 2023, on a 3-year, 7.2% note. Interest is paid annually on January 31.

If required, round amounts to the nearest dollar.

Required:

1. Record the borrowing transaction in Griddleys journal. If an amount box does not require an entry, leave it blank.

Record issuance of notes at par

2. Prepare the adjusting entries made at December 31, 2023 and 2024. If an amount box does not require an entry, leave it blank.

Record interest expense

3. Prepare the necessary journal entry to recognize the first interest payment on January 31, 2024. If an amount box does not require an entry, leave it blank.

Record interest expense and interest payment

4. Indicate how the note and associated interest would be presented in Griddleys December 31, 2024, balance sheet.

Griddley Company Balance Sheet (partial) December 31, 2024

Current Liabilities:

Interest payable $__________

Long term liabilities:

Notes payable 8.6% due in 2026 $71,000

5. Prepare the necessary journal entries to record the repayment of the note and the last years interest payment on January 1, 2026. If an amount box does not require an entry, leave it blank.

Record interest expense and interest payment

Record repayment of note principal