Question

C.S. Sheridan Company had the following transactions involving notes payable.

July 1, 2022		Borrows $53,000 from First National Bank by signing a 9-month, 8% note.
Nov. 1, 2022		Borrows $56,000 from Lyon County State Bank by signing a 3-month, 6% note.
Dec. 31, 2022		Prepares adjusting entries.
Feb. 1, 2023		Pays principal and interest to Lyon County State Bank.
Apr. 1, 2023		Pays principal and interest to First National Bank.

Prepare journal entries for each of the transactions.

Answer 1

Journal entry

Date	account and explanation	Debit	Credit
July 1	Cash	53000
	Notes payable-First national bank		53000
Nov 1	cash	56000
	Notes payable-Lyon country state		56000
Dec 31	Interest expense (53000*8%*6/12)	2120
	Interest payable		2120
	(To record accrued interest)
	Interest expense (56000*6%*2/12)	560
	Interest payable		560
	(To record accrued interest)
Feb 1	Notes payable-Lyon Country state bank	56000
	Interest payable	560
	Interest expense	280
	Cash		56840
Apr 1	Notes payable-First national bank	53000
	Interest payable	2120
	Interest expense	1060
	Cash		56180