On August 1, Belgrano Ltd. Accepted a $26,000 note from Borges Ltd. In settlement of an accounts receivable. The note bears interest of 6% and is due in two months, on October 1. Interest on the note was accrued on August 31 and on September 30. On October 1, Borges paid the note, including the accrued interest,

Instructions

(a) Prepare the journal entries required to record the above transactions.