Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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. | |||||||||
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started