Masys Department Store entered into a new credit agreement with certain financial institutions providing for revolving credit borrowings and letters of credit in an aggregate amount not to exceed $1.5 million. Interest rates are adjustable. The Company supported its operations through short-term note financing in 2020 described as follows:

May 1, 2020 The Company borrowed $500,000 on the revolving credit line, payable in 9 months, at an interest rate of 6%, due upon maturity.

Jan. 31, 2021 Paid off the balance of $500,000 on the revolving credit line plus interest.

Required: Provide the following entries:

1. May 1, 2020Issuance of $500,000 note payable.

2. Dec. 31, 2020Adjusting entry

3. Jan. 1, 2021Payment of $500,000 note payable.