Question

On August 1, 2021, Trico Technologies, an aeronautic electronics company, borrows $19.2 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, 8% promissory note. Interest is payable at maturity. Trico's year-end is December 31 Required: 1.-3. Record the necessary entries in the Journal Entry Worksheet below for Trico Technologies (if no entry is required for a particular 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).) View transaction list Journal entry worksheet 3 Record the issuance of note. Note: Enter debts before credits General Journal Debit Credit August 01, 2021 Record entry Clear entry View general Journal

Answer 1

1.

Date	General Journal	Debit	Credit
August 01, 2021	Cash	$19,200,000
	Note payable		$19,200,000
	( To record the issuance of note)

2.

Date	General Journal	Debit	Credit
December 31, 2021	Interest expense	$640,000
	Interest payable		$640,000
	( To record adjustment entry of interest)

3.

Date	General Journal	Debit	Credit
January 31, 2022	Note payable	$19,200,000
	Interest expense	$128,000
	Interest payable	$640,000
	Cash		$19,968,000
	(To record the repayment of not at maturity)

Interest expense to be recorded on December 31 = 19,200,000 x 8% x 5/12

= $640,000

Interest expense to be recorded on January 31 = 19,200,000 x 8% x 1/12

= $128,000

Kindly comment if you need further assistance.

Thanks‼!