Question

On November 1, Year 1, a company borrows $40,000 cash from Community Savings and Loan. The company signs a three-month, 6% note payable. Interest is payable at maturity. The company's year-end is December 31. Required: 1.-3. Record the necessary entries in the Journal Entry Worksheet below. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet Record the adjusting entry for interest. Note: Enter debits before credits. General Journal Debit Credit Date December 31 Record entry Clear entry View general journal

Answer 1

Credit Journal Entries Date Account Title and Explanation Debit 31-Dec Interest Expense $ 400 Interest Payable (To record accrued interest expense) 400 $ Borrowing Interest rate Interest for 2 months (Nov and Dec) 40,000 6% 400 ($ 40,000 * 6%) /12 Months * 2 Months $