Question

Problem #2 Current Liabilities - Interest Dunlin Development Company had the following transactions involving notes payable. Nov. 1, 2019 Borrows $120.000 from Merchants and Marine Bank by signing a 3-month, 10% note Prepares the adjusting entry. Pays principal and interest to Merchants and Marine Bank Dec 31, 2019 Feb. 1, 2020 Instructions November 1, 2019 December 31, 2019 February 1, 2020

Answer 1

Dunlin Development Company Journal Entery Date Particulars 1.11.2019 Cash a/c Dr. To Note Payable (Note Payable issued) Debit in $ Credit in $ 120000 120000 31.12.2019 Interest Expense a/c Dr. 2000 To Interest Payable (Interest accrued) 120000 x 10% x 2/12 2000 1.2.2020 120000 2000 1000 Note Payable a/c Dr. Interest Payable a/c Dr. Interest Expense a/c Dr. To Cash (Note Payable paid) 120000 x 10% x 1/12 123000