Question

Accounting question

Exercise 9-3 Accounting for note payable LO P1 Sylvestor Systems borrows $145,000 cash on May 15 by signing a 120-day, 7%, $145,000 note. 1. On what date does this note mature? 2-a. Prepare the entry to record issuance of the note. 2-b. First, complete the table below to calculate the interest expense at maturity. Use those calculated values to prepare your entry to record payment of the note at maturity. Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 2B Interest at Maturity Required 2B General Journal On what date does this note mature? On what date does this note mature? Required 1 Required 2ΑΣ

Answer 1

Solution 1:

Date of maturity =15 May + 120 days = 12 September

Soltion 2a:

Date	General Journal	Debit	Credit
15-May	Cash	145,000
	Notes payable		145,000

Solution 2b:

	Interest at Maturity
Principal	145,000
Rate(%)	7%
Time	120 days
Total Interest	3,383

Event	General Journal	Debit	Credit
1	Notes payable	145,000
	Interest expense	3,383
	Cash		148,383