Question

Consider the following note payable transactions of Crandell Video Productions. (Click the icon to view the transactions.) Journalize the transactions for the company. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Sep. 1. 2017: Purchased equipment costing $20,000 by issuing a one-year, 9% noto payable. Date Accounts and Explanation Debit Credit 2017 Sep. 1 Equipment Notes Payable 20,000 20,000 Purchased equipment in exchange for one year, 9% note. Dec 31, 2017: Accrued interest on the note payable. Choose from any list or enter any number in the innut fields and then click Check Answer

Answer 1

ANSWER:

Date	Account title and explanation	debit	credit
2017 sep 1	Equipment notes payable (purchased equipment in exchange for one year 9% note)	$20000 .	. $20000
dec 31	interest expense ($20000 x 9% x (4/12) Interest payable (accrued interest expense at year end)	$600 .	. $600
sep 1	note payable interest expense ($20000 x 9% x (8/12) interest payable Cash (notes payable and interest paid at maturity)	$20000 $1200 $600 .	. . . $21800