Question

Explain the exercise with correct accounting terminology and quantities are referred to by their proper names (not just the number values).

Oriole Company borrows $68,400 on July 1 from the bank by signing a $68,400, 6%, 1-year note payable. (a) Prepare the journal entry to record the proceeds of the note. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit July 1 (b) Prepare the journal entry to record the accrued interest at December 31, assuming adjusting entries are made only at the end of the year. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31 Click if you would like to Show Work for this question: Open Show Work

Answer 1

Date	Account Titles and Explanation	Debit	Credit
July 1	Cash	$68,400
	Notes Payable		$68,400
Dec. 31	Interest Expense	$2,052
	Interest Payable ($68,400*6%*6/12)		$2,052