On November 1, 2013, Quantum Technology, a geothermal energy supplier, borrowed $4 million cash to fund a geological survey. The loan was made by Nevada BancCorp under a noncommitted short-term line of credit arrangement. Quantum issued a nine-month, 9% promissory note. Interest was payable at maturity. Quantums fiscal period is the calendar year.

Required:

1.

Prepare the journal entry for the issuance of the note by Quantum Technology. (If no entry is required for a transaction, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)

Journal Accounts:

Accounts receivable

Accrued bonus compensation payable

Allowance for uncollectible accounts

Bad debt expense

Bonus compensation expenses

Cash

Cash, wages payable, parts and supplies, etc.

Cost of goods sold

Discount on notes payable

Estimated premium liability

Estimated warranty liability

Federal unemployment tax payable

GainLitigation

Interest expense

Interest payable

Interest receivable

Interest revenue

Inventory of containers

Liability for settlement of environmental claims

LiabilityCompensated future absences

LiabilityCustomer advance

LiabilityGift certificates

LiabilityLitigation

LiabilityProduct recall

LiabilityRefundable deposits

LiabilityUnearned gift card revenue

Life insurance payable

Loss provision from environmental claims

LossLitigation

LossProduct recall

Medical insurance payable

Medicare taxes payable

Notes payable

Notes receivable

Payroll tax expense

Promotional expense

Rent revenue

Retirement plan payable

RevenueExtended warranties

RevenueGift cards

RevenueSale of containers

Sales revenue

Sales taxes payable

Social security taxes payable

State unemployment tax payable

Unearned rent revenue

Unearned revenueExtended warranties

Wages expense

Warranty expense

Warranty liability

Withholding taxes payable

Calculate the total interest payable through maturity, also calculate the interest payable for the year ended December 31, 2013 and December 31, 2014 (Enter your answers in whole dollars.)

	Principal	x Rate		x Time	= Interest
Total through maturity	$4,000,000		%
2013 interest			%
2014 interest			%

Time Choices:

1/12

2/12

3/12

4/12

5/12

6/12

7/12

8/12

9/12

10/12

11/12

12/12

2.

Prepare the appropriate adjusting entry for the note by Quantum on December 31, 2013. (If no entry is required for a transaction, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)

3.	Prepare the journal entry for the payment of the note at maturity. (If no entry is required for a transaction, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)