Question

Problem 8-2B Record notes payable and notes receivable (LO8-2)

[The following information applies to the questions displayed below.]

Eskimo Joe’s, designer of the world’s second best-selling T-shirt (just behind Hard Rock Cafe), borrows $19.9 million cash on November 1, 2021. Eskimo Joe’s signs a six-month, 9% promissory note to Stillwater National Bank under a prearranged short-term line of credit. Interest on the note is payable at maturity. Each firm has a December 31 year-end.

Required information Problem 8-2B Record notes payable and notes receivable (LO8-2) (The following information applies to the questions displayed below.] Eskimo Joe's, designer of the world's second best-selling T-shirt (just behind Hard Rock Cafe), borrows $19.9 million cash on November 1, 2021. Eskimo Joe's signs a six-month, 9% promissory note to Stillwater National Bank under a prearranged short-term line of credit. Interest on the note is payable at maturity. Each firm has a December 31 year-end. Problem 8-2B Part 1 Required: 1. Prepare the journal entries on November 1, 2021, to record the issuance of the note. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions. For example, $5.5 million should be entered as 5,500,000.) View transaction list Journal entry worksheet 1 2 Record the issuance of the note to Eskimo Joe's.

Answer 1

1
November 1, 2021	Cash	19900000
	Notes Payable		19900000
November 1, 2021	Notes Receivable	19900000
	Cash		19900000
2
December 31, 2021	Interest Expense	298500		=19900000*9%*2/12
	Interest Payable		298500
December 31, 2021	Interest Receivable	298500
	Interest revenue		298500
3
April 30,2022	Notes Payable	19900000
	Interest Expense	597000		=19900000*9%*4/12
	Interest Payable	298500
	Cash		20795500
April 30,2022	Cash	20795500
	Interest Receivable		298500
	Interest revenue		597000
	Notes Receivable		19900000