Question

QUESTION 12

C.S. Crane Company had the following transactions involving notes payable.

July 1, 2022		Borrows $104,000 from First National Bank by signing a 9-month, 8% note.
Nov. 1, 2022		Borrows $107,000 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.)

Answer 1

Date	Accounts	debit	credit
Jul-01	Cash	$ 104,000.00
	Notes payable		$ 104,000.00
	(8% not from first national bank)
Nov-01	Cash	$ 107,000.00
	Notes payable		$ 107,000.00
	(6% not from lyon county state bank)
Dec-31	Interest expense	$      4,160.00
	interest payable		$      4,160.00
	(FNB Note)
	(104000*8%*6/12)
	Interest expense	$      1,070.00
	interest payable		$      1,070.00
	(LCSB Note)
	(107000*6%*2/12)
Feb-01	Notes payable	$ 107,000.00
	interest expense	$          535.00
	(104000*6%*1/12)
	interest payable	$      1,070.00
	cash		$ 108,605.00
Apr-01	Notes payable	$ 104,000.00
	interest expense	$      2,080.00
	(107000*8%*3/12)
	interest payable	$      4,160.00
	cash		$ 110,240.00