Answer
--Journal entries
Date |
Accounts title |
Debit |
Credit |
Nov-01 |
Cash |
$250,000 |
|
Notes Payable |
$250,000 |
||
(to record issuance of notes) |
|||
Dec-31 |
Interest Expense |
$4,167 |
|
Interest Payable |
$4,167 |
||
(to record 60 days interest accrued) |
|||
Apr-30 |
Notes Payable |
$250,000 |
|
Interest Payable |
$4,167 |
||
Interest Expense |
$8,333 |
||
Cash |
$262,500 |
||
(to record payment) |
--Working
Total through maturity |
Nov 1 through Dec 31 |
Jan 1 through April 30 |
|
Principal |
$250,000 |
$250,000 |
$6,000 |
Rate % |
10% |
10% |
8% |
Time |
180/360 |
60/360 |
120/360 |
Total Interest |
$12,500 |
$4,167 |
$8,333 |
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