Question

QS 9-4 Interest-bearing note transactions LO P1 On November 7, Mura Company borrows $330,000 cash by signing a 90-day, 5%, $330,000 note payable. 1. Compute the accrued interest payable on December 31. 2. & 3. Prepare the journal entry to record the accrued interest expense at December 31 and payment of the note at maturity on February 5. Complete this question by entering your answers in the tabs below. Reg 1 Reg and 3 Compute the accrued interest payable on December 31. (Use 360 days a year. Do not round your intermediate calculations.) Principal x Rate (%) x Time = Interest % Total through maturity Year end interest accrual Interest recognized February 5 % %

Answer 1

Requirement 1:

	Principal	X Rate(%)	xTIme	=	Interest
Total through maturity	$        330,000	5%	90/360	=	$        4,125
Year end interest accrual	$        330,000	5%	54/360	=	$        2,475
Interest recognized february 5	$        330,000	5%	36/360	=	$        1,650

Requirement 2& 3:

Date	General journal	Debit	Credit
Dec,31	Interest expense [330000*5%*54/360]	$      2,475
	Interest payable		$      2,475
	(To record accrual of interest expense )
Feb,05	Notes payable	$ 160,000
	Interest payable	$      2,475
	Interest expense [330000*5%*36/360]	$      1,650
	Cash		$ 164,125
	(To record repayment of notes payable)