Answer:
S.No | Date | Particulars | Debit ($) | Credit ($) |
1 | Issuance of the note by resources | |||
11/1/2019 | Cash | 79,500,000 | ||
Notes payable | 79,500,000 | |||
2 | Adjusting entry for the note by Ontario Resources | |||
12/31/2019 | Interest expenses | 1,590,000 | ||
Interest payable | 1,590,000 | |||
(79500000*12%*2/12) | ||||
3 | Payment of the note at maturity: | |||
8/1/2020 | Interest expense | 5,565,000 | ||
Interest payable (from adjusting entry) | 1,590,000 | |||
Notes payable (face amount) | 79,500,000 | |||
Cash | 86,655,000 | |||
(79500000*12%*7/12) |
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