Question

Journalize the following, assuming a 360-day year is used for interest calculations:

Apr. 30		Issued a $150,000, 30-day, 6% note dated April 30 to Misner Co. on account.
May 30		Paid Misner Co. the amount owed on the note dated April 30

Answer 1

Journal Entries:

Date	Account Title	Debit($)	Credit($)
April 30	Misner Co. A/c	150,000
	6% Note Payable A/c		150,000
	(Recording of Issue of Note)
May 30	6% Note Payable A/c	150,000
	Interest Expenses A/c	750
	Cash A/c		150,750
	(Recording of Payment of Note)

Calculation of Interest:

150,000 x 6% = 9,000 x 30 / 360 = $750