Question

On August 1, 2018, Trico Technologies, an aeronautic electronics company, borrows $20.3 million cash to expand operations. The loan is made by FirstBanc Corp. under a short-term line of credit arrangement. Trico signs a six-month, 6% promissory note. Interest is payable at maturity. FirstBanc Corp.’s year-end is December 31.

Required:

1., 2.& 3. Record the necessary entries in the Journal Entry Worksheet below for FirstBanc Corp. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in dollars, not in millions (i.e. 5 should be entered as 5,000,000).)

Answer 1

Notes Receivable	20,300,000
Cash		20,300,000
Interest receivable	507,500
Interest revenue		507,500
(20.3 m * 6% * 5/12)
Cash	20,909,000
Notes Receivable		20,300,000
Interest revenue (20.3*6%*1/12)		101,500
Interest receivable		507,500