On March 1, Mena Company borrows $150,000 from High Country Bank by signing a 6-month, 8%, interest-bearing note.

Instructions

Prepare the necessary entries below associated with the note payable on the books of Mena Company.

(a) Prepare the entry on March 1 when the note was issued. (1 mark)

(b) Prepare any adjusting entries necessary on June 30 in order to prepare the semi-annual financial statements. Assume no other interest accrual entries have been made. (2 marks)

(c) Prepare the adjusting entry at August 31 to accrue interest. (1 mark)

(d) Prepare the entry to record payment of the note at maturity. (2 marks)