Notes Payable

Renchen Company, which manufactures steel tubing and casing for automobile production, borrowed $396,000 on January 1 to finance the purchase of a new piece of machinery with new heating technology. The terms of Renchen's note dictate that it is a 6-month, 8%, interest-bearing note.

Required:

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1.Record the borrowing transaction.

2.Record the repayment transaction.