xercise 13-3 (Algo) Short-term notes [LO13-2]

The following selected transactions relate to liabilities of United Insulation Corporation. Uniteds fiscal year ends on December 31.

2024

January 13	Negotiated a revolving credit agreement with Parish Bank that can be renewed annually upon bank approval. The amount available under the line of credit is $30.5 million at the banks prime rate.
February 1	Arranged a three-month bank loan of $7.8 million with Parish Bank under the line of credit agreement. Interest at the prime rate of 12% was payable at maturity.
May 1	Paid the 12% note at maturity.
December 1	Supported by the credit line, issued $18.0 million of commercial paper on a nine-month note. Interest was discounted at issuance at a 11% discount rate.
December 31	Recorded any necessary adjusting entry(s).

2025

September 1	Paid the commercial paper at maturity.