Question

QUESTION 2 Jan 31, 2018 a company borrowed a 2% $1000 one-year note payable. Show both journal entries for 2018.

Answer 1

Date		Debit	Credit
Jan 31, 2018	Cash	$1,000
	Note Payable		$1,000
	To record note payable; Maturity date Jan 30, 2018
Dec 31, 2018	Interest Expense	$        18.33
	Interest Payable		$        18.33
	To record interest for 11 months ($1,000x2%x11/12)
Jan 30, 2019	Interest Expense	$          1.67
	Interest Payable		$          1.67
	To record interest for 1 month ($1,000x2%x1/12)
Jan 30, 2019	Interest Payable	$              20
	Note Payable	$        1,000
	Cash		$        1,020
	To record repayment of note and interest