PROBLEM: 1

On April 1, Hoadley Company borrows $90,000 from Northwest Provincial Bank by signing a 6-month, 6%, interest-bearing note. Hoadley's year end is August 31.

Instructions

Prepare the following entries associated with the note payable on the books of Hoadley Company:

a)The entry on April 1 when the note was issued.

b)Any adjusting entries necessary on May 31 in order to prepare the quarterly financial statements. Assume no other interest-accrual entries have been made.

c)The adjusting entry at August 31 to accrue interest.

d)The entry to record payment of the note at maturity.