Question

Exercise 8-4A Record notes receivable (L08-2) On August 1, 2021, Trico Technologies, an aeronautic electronics company, borrows $20.9 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.-3. Record the necessary entries in the Journal Entry Worksheet below for FirstBanc Corp. (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 2 3 Record the acceptance of note. Note: Enter debits before credits. General Journal Debit Credit Date August 01, 2021

Answer 1

Date	General Journal	Debit	Credit
August 01, 2021	Cash	$20,900,000
	Notes Payable		$20,900,000
December 31, 2021	Interest Expense ($20,900,000 x 6% x 5/12)	$522,500
	Interest Payable		$522,500
January 31, 2022	Notes Payable	$20,900,000
	Interest Expense ($20,900,000 x 6% x 1/12)	$104,500
	Interest Payable ($20,900,000 x 6% x 5/12)	$522,500
	Cash		$21,527,000