Question

D.T. Cucumber Company had the following transactions involving notes payable.

July 1, 2022		Borrows $107,000 from First National Bank by signing a 9-month, 8% note.
Nov. 1, 2022		Borrows $110,000 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.

Date	Account Titles and Explanations	Debit	Credit

Answer 1

Prepare journal entries for each of the transactions.

Date	Account Titles and Explanations	Debit	Credit
July 1	Cash	107000
	Notes payable-First national bank		107000
Nov 1	Cash	110000
	Notes payable-Lyon country state bank		110000
Dec 31	Interest expense (107000*8%*6/12)	4280
	Interest payable		4280
	(to record accrued interest)
	Interest expense (110000*6%*2/12)	1100
	Interest payable		1100
	(To record accrued interest)
Feb 1	Notes payable-Lyon country state bank	110000
	Interest payable	1100
	Interest expense	550
	Cash		111650
	(to record payment)
Apr 1	Notes payable-First national bank	107000
	Interest payable	4280
	Interest expense	2140
	Cash		113420
	(To record payment)