Assume Strand Corp borrowed $240,000 from the bank on 7/1/17; Strand is a calendar year-end. Interest...
Assume Strand Corp borrowed $240,000 from the bank on 7/1/17; Strand is a calendar year-end. Interest rate 10%. It is a 1 year note, payable at the end of 1 year. Make the necessary journal entry on 7/1/17, 12/31/17 and 6/30/18
Homework Answers
Journal entries
| Date | account and explanation | debit | credit |
| July 1 | Cash | 240000 | |
| Notes payable | 240000 | ||
| (To record borrow) | |||
| Dec 31 | Interest expense (240000*10%*6/12) | 12000 | |
| Interest payable | 12000 | ||
| (To record interest) | |||
| June 30 | Notes payable | 240000 | |
| Interest payable | 12000 | ||
| Interest expense | 12000 | ||
| Cash | 264000 | ||
| (To record amount paid) | |||
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