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On July 1, 2021, Bender Products Company borrowed $100,000 from Great Lakes National Bank by signing a 6-month. 5%, interest-bearing note with a repayment date
On July 1, 2021, Bender Products Company borrowed $100,000 from Great Lakes National Bank by signing a 6-month. 5%, interest-bearing note with a repayment date of January 1. 2022. Instructions Prepare the following journal entries associated with the note payable on the books of Bender Products Company. (a) Prepare the entry on July 1, 2021 when the money was borrowed and the note was issued. (b) Prepare the adjusting entry needed at the end of the year on December 31, 2021 in order to prepare the income statement for the year ending December 31, 2021. Assume no adjusting entries for interest have been made, therefore, you are accruing 6 months of interest (July 1st through December 31st). Hint: remember, the 5% interest is the "annual rate of interest". (c) Prepare the entry to record paying off the note at maturity on January 1, 2022
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