Question

Sunland Company borrows $88,800 on July 1 from the bank by signing a $88,800, 9%, 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

Journal entries

Date	account and explanation	Debit	Credit
July 1	Cash	88800
	Notes payable		88800
Dec 31	Interest expense (88800*9%*6/12)	3996
	Interest payable		3996

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