Use the following to answer questions 6 10

On September 1^st, the company borrows $1,000,000 cash from the bank to expand operations. The company signs a 1 year, 6% promissory note. The companys year-end is December 31.

8. $_________ How much interest should be accrued on December 31 of the first year (assume no previous entry was recorded for interest on the loan)?

9. $___________When the note is paid at maturity (August 31, year 2) how much cash is paid to the bank?

10. $_________ When the note is paid at maturity in the second accounting year, how much does net income decrease?

On July 1st company borrows $100,000 by issuing a one-year note compounding annually. Interest is payable at maturity.

11. $___________Determine the amount of interest expense that should be recorded in a year-end adjusting entry assuming a 8% interest rate and a fiscal year-end September 30.