Luke Company borrows $205,000 cash on November 1 of the current year by signing a 150-day, 8%, $205,000 note. 1. On what date does this note mature? ______

2. & 3. What is the amount of interest expense in the current year and the following year from this note? (Please fill in highlighted portion only).

4. Prepare journal entries to record (a) issuance of the note, (b) accrual of interest on December 31, and (c) payment of the note at maturity.

1) Record the issuance of the note on November 1.

Debit ____ Credit_____

2) Record the interest accrued on the note as of December 31, current year.

Debit_____ Credit_____

3) Record payment of the note at maturity, assuming no reversing entries were made on January 1.

Debit_____ Credit _____

\begin{tabular}{l|l|l|l|l} \hline & Total through maturity & Interest Expense Current Year & Interest Expense Following Year \\ \hline Principal & & & \\ \hline Rate (\%) & & & \\ \hline Time & & & \\ \hline Total interest & & & \\ \hline \end{tabular}