Use the information in RE3-7,
(a) Assuming Ranee Company makes reversing entries, prepare the reversing entry on January 1, 2011, and the journal entry to record the payment of the note on April 1, 2011;
(b) Assuming Ranee Company does not make reversing entries, prepare the journal entry to record the payment of the note on April 1, 2011.
In RE3-7, On April 1, 2010, Ranee Company borrowed $20,000 from its bank by issuing a 9%, 12-month note, with the interest to be paid on the maturity date. Prepare journal entries to record the issuance of the note and the related-year end adjusting entry.