Question

On August 1, 2021, Trico Technologies, an aeronautic electronics company, borrows $19.5 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, 8% promissory note. Interest is payable at maturity. Trico's year-end is December 31. Required: 1.-3. Record the necessary entries in the Journal Entry Worksheet below for Trico Technologies. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions (i.e. 5 should be entered as 5,000,000).) View transaction list Journal entry worksheet < 1 2 3 Record the issuance of note. Note: Enter debits before credits. General Journal Debit Credit Date August 01, 2021 Record entry View general journal Clear entry

Answer 1

Debit Credit General Jour nap Date 19,S00,009 Cash August o1, Notes Payable (To Aecord issuance o F19,S00,000 209) noles payable December 31, 6 50,000 Snterest Expense $650,000 3nterest fayable To AecoAd interest cepense incurreol) Notes fayable 19,S00,000 January 31 130,000 nterest Expense Lodd 650,000 ntercst fayable f20,280,000 Cash To Recordl payment o notes Payable and iuterest

Caleulation : 19,500,000 x 87 x 5months Sec 31,do21: Jnterest Expense / 2 $650,000 Jan. 3), o9a Snterest Expense =19,50o,000 x 87 xImonth 1 2 F 130,000 Jnterest Payable 19,500,000 x 8% x 5ronths 12 46 50,000

piscal Year-nd nterest Ratu Snterest Expense 245,000 1. 10 7. December 31 134,750 196,000 2. september 30 127 October 31 3. 67 41 $171,500 January 31 Calculation: tnterert Expense Phincipal x Rate x Time 3nterest Enpense 4,900,000 X 107 x 6mOnths 1 2 f245,000 gnterest Enpense 4,00,000 117, x 3Months 12 134,750 (3) Jnterest npense -4,900,000 x 1 xyontht 12 P196,000 tnterest Enpense 4,900,000 K 67 xtmonths 4171,500