Question

Exercise 9-4 Interest-bearing notes payable with year-end adjustments LO P1 Keesha Co. borrows $130,000 cash on November 1 of the current year by signing a 180-day, 11%, $130,000 note 1. On what date does this note mature? 2&3. What is the amount of interest expense in the current year and the following year from this note? 4. Prepare journal entries to record (a) issuance of the note, (b) accrual of interest on December 31, and (c) payment of the note at maturity. Complete this question by entering your answers in the tabs below. Req 1 Req 2 and 3 Req 4 On what date does this note mature? (Assume that February has 28 days) On what date does this note mature? Reg 1 Req 2 and 3 >

Answer 1

1. 29th April (Next year)

2.

	Total Through Maturity	Interest Expense Current Year	Interest Expense Following Year
Principal	130,000.00	130,000.00	130,000.00
Rate (%)	11%	11%	11%
Time	180/360	60/360	120/360
Total Interest	7,150.00	2,383	4,767

3)

Date	General Journal	Debit	Credit
Nov-01	Cash	130,000.00
	Notes Payable		130,000.00
Dec-31	Interest Expense	2,383.00
	Interest Payable		2,383.00
Apr-29	Notes Payable	130,000.00
	Interest Payable	2,383.00
	Interest Expense	4,767.00
	Cash		137,150.00