Question
Jung & Newbicalm Advertising (JNA) recently hired a new creative director, Howard Rachell, for its Madison Avenue office in New York. To persuade Howard to
Jung & Newbicalm Advertising (JNA) recently hired a new creative director, Howard Rachell, for its Madison Avenue office in New York. To persuade Howard to move from San Francisco, JNA agreed to advance him $200,000 on April 30, 2021, on a one-year, 9 percent note, with interest payments required on October 31, 2021, and April 30, 2022. JNA issues quarterly financial statements on March 31, June 30, September 30, and December 31.
Required:
Prepare journal entries to record the notes issuance, interest earned, and interest payments received for each quarter and on each payment date. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations. Round your final answers to whole dollar amount)
- To record the promissory note created on April 30, 2021. (TIP: See Demonstration Case B for a similar problem.)
- To record the interest accruals at each quarter-end and interest payments at each payment date (TIP: Interest receivable will be accrued at the end of each quarter, and then will be reduced when the interest payment is received.)
- To record the principal payment at the maturity date.
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