Question

Cullumber Company borrows $87.600 on July 1 from the bank by signing a $87,600, 10%, 1-year note payable. Prepare the journal entry to record the proceeds of the note. (Credit account titles are automatically indented when amount is ent Debit Credit Date Account Titles and Explanation July 1 Prepare the journal entry to record the accrued interest at December 31, assuming adjusting entries are made only at the end of the manually.) Date Account Titles and Explanation Debit Credit Dec 31

Answer 1

	Date	Account title and explanation	Debit	Credit
a.	July 1	Cash	$87,600	-
		Note payable	-	$87,600
		(To record cash borrowed)
b	Dec 31	Interest expense	$4,380	-
		Interest payable	-	$4,380
		(To record interest expense accrued)