Question

Midock, Inc. borrows $76,800 on July 1 from the bank by signing a $76,800, 6%, 1-year note payable.

Prepare the journal entry to record the proceeds of the note.

Date	Account Titles and Explanations	Debit	Credit
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 year.

Date	Account Titles and Explanations	Debit	Credit
Dec 31

Answer 1

Credit Date Accounts Title and Explaination Jul-01 Cash To Notes Payable Debit $76,800.00 $76,800.00 (To Record the Proceeds of Note) $ 2,304.00 Dec-31 Interest Expense To Interest Payable $ 2,304.00 76800*6%*6/12 (To Record the Accrued interest at Dec end)