Question

Brief Exercise 13-02 

Upland Company borrowed $40,000 on November 1, 2020, by signing a $40,000, 9%, 3-month note. Prepare Upland's November 1, 2020, entry; the December 31, 2020, annual adjusting entry; and the February 1, 2021, entry. (If no entry is required, select "No Entry" for the account titles and enter o for the amounts. 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 titles and Explanation	Debit ($)	Credit ($)
2020
Nov-01	Cash	40,000
	Note payable		40,000
	(To record notes payable)
Dec-31	Interest expense ($40,000*9%*2/12)	600
	Interest payable		600
	(To record interest on notes payable)
2021
Feb-01	Note payable	40,000
	Interest expense ($40,000*9%*1/12)	300
	Interest payable	600
	Cash		40,900
	(To record cash payment for notes and interest )