Question

C.S. Ivanhoe Company had the following transactions involving notes payable. July 1, 2022 Borrows $41,000 from First National Bank by signing a 9-month, 8% note. Nov. 1, 2022 Borrows $44,000 from Lyon County State Bank by signing a 3-month, 6% note. Dec 31, 2022 Prepares adjusting entries. Feb. 1, 2023 Pays principal and interest to Lyon County State Bank. Apr. 1, 2023 Pays principal and interest to First National Bank. Prepare journal entries for each of the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit 1. 2022 Cash 41000 Notes Payable 41000 mber 1, 2022 Cash 44000 Notes Payable 44000 mber 31, 2022 Interest Expense 2460

Answer 1

Date	Account Titles and Explanation	Debit	Credit
July 1, 2022	Cash	$41,000
	Notes Payable		$41,000
Nov. 1, 2022	Cash	$44,000
	Notes Payable		$44,000
Dec. 31, 2022	Interest Expense           [$41,000 x 8% x (6 months /12 months)]	$1,640
	Interest Payable		$1,640
	(To record accrual of interest from First National Bank)
Dec. 31, 2022	Interest Expense           [$44,000 x 6% x (2 months /12 months)]	$440
	Interest Payable		$440
	(To record accrual of interest from Lyon Country State Bank)
February 1, 2023	Interest Expense           [$44,000 x 6% x (1 months /12 months)]	$220
	Interest Payable	$440
	Notes Payable	$44,000
	Cash                    [$220 + $440 + $44,000]		$44,660
April 1, 2023	Interest Expense           [$41,000 x 8% x (3 months /12 months)]	$820
	Interest Payable	$1,640
	Notes Payable	$41,000
	Cash                    [$820 + $1,640 + $41,000]		$43,460