Proco had an account payable of $$7,000$ due to Shirmoo Incorporated, one of its suppliers. The amount was due to be paid on January $31.$ Proco did not have enough cash on hand then to pay the amount due, so Proco's treasurer called Shirmoo's treasurer and agreed to sign a note payable for the amount due. The note was dated February $1,$ had an interest rate of $9\%$ per annum, and was payable with interest on May $31.$

Required:

Use the horizontal model to show the effects $(+$ for addition and $$ for subtraction$)$ of each of these transactions and adjustments for Proco on the following:

February $1,$ to show that the account payable had been changed to a note payable.

March $31,$ to accrue interest expense for February and March.

May $31,$ to record payment of the note and all of the interest due to Shirmoo.

Prepare the journal entries to show each of these transactions and adjustments.Exercise $4-18($Algo$)$ Notes payable$-$interest accrual and payment LO $4-6,4-7$

Proco had an account payable of $$7,000$ due to Shirmoo Incorporated, one of its suppliers. The amount was due to be paid on January

Proco did not have enough cash on hand then to pay the amount due, so Proco's treasurer called Shirmoo's treasurer and agreed

to sign a note payable for the amount due. The note was dated February $1,$ had an interest rate of $9\%$ per annum, and was payable

with interest on May $31.$

Required:

a$.$ Use the horizontal model to show the effects $(+$ for addition and $-$ for subtraction$)$ of each of these transactions and adjustments for

Proco on the following:

February $1,$ to show that the account payable had been changed to a note payable.

March $31,$ to accrue interest expense for February and March.

May $31,$ to record payment of the note and all of the interest due to Shirmoo.

b$.$ Prepare the journal entries to show each of these transactions and adjustments.

Complete this question by entering your answers in the tabs below.

Required $A$

Use the horizontal model to show the effects $(+$ for addition and $-$ for subtraction$)$ of each of these transactions and adjustments for Proco on the following:

a$.$ February $1,$ to show that the account payable had been changed to a note payable.

b$.$ March $31,$ to accrue interest expense for February and March.

c$.$ May $31,$ to record payment of the note and all of the interest due to Shirmoo.