Question 11: A company borrows $50,000 from a bank by signing a promissory note with a 6-month term and an annual interest rate of 8%. Provide a detailed explanation of the journal entries and subsequent adjustments to record the loan proceeds, accrued interest, and repayment.

Requirements:

1. Record the journal entry to recognize the loan proceeds received from the bank.
2. Post the journal entry to the Cash account in the ledger.
3. Calculate the amount of accrued interest at the end of the first month.
4. Record the journal entry to recognize accrued interest expense.
5. Post the journal entry to the Interest Expense account in the ledger.
6. Prepare an adjusting entry to accrue interest at the end of the second month.
7. Analyze the impact of interest accrual on the company's financial statements.
8. Record the journal entry to repay the loan at maturity.
9. Post the journal entry to the Notes Payable and Cash accounts in the ledger.
10. Discuss the implications of borrowing on a company's liquidity and financial position.