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Many businesses borrow money during periods of increased business activity to finance inventory and accounts receivable. Nest

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Journal Entries
Date Particulars Debit Credit
1-Nov Cash Dr $4,700,000.00
         To Notes Payable $4,700,000.00
(To record amount borrowed by issuing of note)
31-Dec Interest expense Dr ($4,700,000*10%*2/12) $78,333.00
         To Interest payable $78,333.00
(To record interest accrued)
30-Apr Interest expense Dr $156,667.00
Interest payable Dr $78,333.00
Notes payable Dr $4,700,000.00
         To Cash $4,935,000.00
(To record note payment at maturity)
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