Question

On April 1, Carla Vista Company borrows $110,000 from West Bank by signing a 6-month, 8%, interest-bearing note. Prepare the necessary entries below associated with the note payable on the books of Carla Vista Company.

Prepare the entry on April 1 when the note was issued. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit April 1 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a debit amount SHOW LIST OF ACCOUNTS

Prepare any adjusting entries necessary on June 30 in order to prepare the semiannual financial statements. Assume no other interest accrual entries have been made. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit June 30 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount

Answer 1

Date	Account	Debit	Credit
Apr 1	Cash	110,000
	Notes payable		110,000
June 30	Interest expense	2200
	Interest payable (110,000*8%*3/12)		2200

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