Question

On June 1, Huntley Company borrows $50,000 from the bank by signing a 60-day, 6%, interest-bearing note. Prepare the necessary entries below associated with the note payable on the books of Huntley Company.

Prepare the entry on June 1 when the note was issued. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit June 1 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount SHOW LIST OF ACCOUNTS

Prepare any adjusting entries necessary on June 30 in order to prepare the monthly financial statements. Assume no other interest accrual entries have been made. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit June 30 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount SHOW LIST OF ACCOUNTS

Prepare the entry to record payment of the note at maturity. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit July 31 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount

Answer 1

Date	Account Titles and Explanation	Debit	Credit
Jun-01	Cash	$ 50,000
	Notes Payable		$ 50,000
	(To record the Issue of the Note )
Jun-30	Interest Expense       ($ 50,000 x 6% x 1 /12)	$ 250
	Interest Payable		$ 250
	(Being adjusting entries necessary on June 30)
Jul-31	Notes Payable	$ 50,000
	Interest Payable ( $ 50,000 x 6% x 1 /12)	$ 250
	Interest Expense ( $ 50,000 x 6% x 1/12)	$ 250
	Cash		$ 50,500
	(To record payment of the note at maturity )