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On November 30, 2016, ABC borrowed $40,000 from American National Bank by issuing an interest-bearing note payable. This loan is to be repaid in three
On November 30, 2016, ABC borrowed $40,000 from American National Bank by issuing an interest-bearing note payable. | |||||||||
This loan is to be repaid in three months (on February 28, 2017), along with interest computed at an annual rate of 9%. | |||||||||
The entry made on November 30 to record the borrowing was: | |||||||||
Dr Cash | 40,000 | ||||||||
Cr Notes payable | 40,000 | ||||||||
On February 28, 2017, ABC must pay the bank the amount borrowed plus interest. | |||||||||
Assume the beginning balance for Notes Payable is correct. | |||||||||
Interest through 12/31/16 must be accrued on the $40,000 note. make an adjustment for the journal entry. |
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