Question

Brief Exercise 10-02 Larkspur, Inc. borrows $92,400 on July 1 from the bank by signing a $92,400, 10%, 1-year note payable. (a) Prepare the journal entry to record the proceeds of the note. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Debit Credit Date Account Titles and Explanation July 1 (b) Prepare the journal entry to record the accrued interest at December 31, assuming adjusting entries are made only at the end of the year. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31

Answer 1

Answer of Part 2: Credit No. Date A July 1 Debit 92,400 Accounts Titles & Explanation Cash Notes Payable Interest Expense ($92,400 *10% * 6/12) Interest Payable 92,400 Dec 31 4,620 4,620