Question

The following selected transactions relate to liabilities of United Insulation Corporation. United's fiscal year ends on December 31 2021 Jan. 13 Negotiated a revolving credit agreement with Parish Bank that can be renewed annually upon bank approval. The amount available under the line of credit is $25.0 million at the bank's prime rate. Feb. 1 Arranged a three-month bank loan of $4.5 million with Parish Bank under the line of credit agreement. Interest at the prime rate of 6% was payable at maturity. May 1 Paid the 6% note at maturity. Dec. 1 Supported by the credit line, issued $15.3 million of commercial paper on a nine-month note. Interest was discounted at issuance at a 5% discount rate. 31 Recorded any necessary adjusting entry(s). 2022 Sept. 1 Paid the commercial paper at maturity. Requited: Prepare the appropriate journal entries through the maturity of each liability (If no entry is required for a transaction/event, select "No journal entry required in the first account field. Do not round Intermediate calculations. Enter your answers in whole dollars.) View transaction list Journal entry worksheet

Answer 1

C Debit 45.00.000 Credit 45,00,000 В 1 Date Particulars 2 Feb 01, 2021 Cash Alc. Dr 3 Short term Notes payable 4 5 May 01, 2021 Interest Expense Short term Notes payable Cash Alc 67.500 45,00,000 45,67,500 7 8 1,47,26,250 5,73,750 1,53,00,000 63,750 9 Dec 01, 2021 Cash Alc... Dr 10 Discount on Notes Payable 11 Notes Payable 12 13 Dec 31, 2021 Interest Expense Discount on Notes Payable 15 16 17 Sep 01, 2022 Interest Expense Discount on Notes Payable 14 63,750 5,10,000 5,10,000 Sep 01, 2022 Short term Notes payable | 1,53,00,000 Cash Alc 1,53,00,000

D Credit Debit 4500000 =+C2 в i Date Particulars 2 Feb 01, 2021 Cash A/c....Dr 3 Short term Notes payable 4 5 May 01, 2021 Interest Expense Short term Notes payable Cash Alc =+C2*6%*0.25 1=+C2 6 =+C6+C5 9 Dec 01, 2021 Cash Alc. Dr =+D11-C10 10 Discount on Notes Payable=15300000*5%*0.75 11 Notes Payable 15300000 12 =15300000*5%*1/12 1=+C13 13 Dec 31, 2021 Interest Expense 14 Discount on Notes Payable 15 16 17 Sep 01, 2022 Interest Expense Discount on Notes Payable 19 =15300000*5%*8/12 15+C17 18 20 1=+D11 22 Sep 01, 2022 Short term Notes payable 23 Cash A/C 24 =+C22