Question

On August 1, 2021, Trico Technologies, an aeronautic electronics company, borrows $20.4 million.cash to expand operations. The loan is made by FirstBanc Corp. under a short-term line of credit arrangement. Trico signs a six-month, 9 % promissory note. Interest is payable at maturity. Trico's year-end is December 31 Requlred: 1-3. Record the necessary entries in the Jounal Entry Worksheet below for Trico Technologies. (If no entry is required for a partieuler transaction/event, select "No Journal Entry Requlred" In the first account fleld. Enter your answers In dollars, not in millons (Le. 5 should be entered as 5,000,0o0).) View transaction list Journal entry worksheet 2 3 > Record the issuance of note. Note: Enter debits before credits Date General Journal Debit Credit August 01, 2021 Record entry Clear entry View general joumal 1 of 4 Pre Next> ere to search ip

Answer 1

Solution:

Journal Entries - Trico Technologies
Date	Particulars	Debit	Credit
1-Aug-21	Cash Dr	$20,400,000.00
	To Notes Payable		$20,400,000.00
	(To record amount borrowed by issue of note)
31-Dec-21	Interest expense Dr ($20,400,000*9%*5/12)	$765,000.00
	To Interest Payable		$765,000.00
	(Being interest accrued on note)
1-Feb-21	Notes Payable Dr	$20,400,000.00
	Interest payable Dr	$765,000.00
	Interest expense Dr ($20,400,000*9%*1/12)	$153,000.00
	To Cash		$21,318,000.00
	(To record payment at maturity)