Question

Consider the following note payable transactions of Cadek 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.) Aug. 1, 2017: Purchased equipment costing $22,000 by issuing a one-year, 6% note payable. Date Accounts and Explanation Debit Credit 2017 Aug. 1 Equipment 22,000 Notes Payable 22,000 Purchased equipment in exchange for one-year, 6% note. Dec. 31, 2017: Accrued interest on the note payable. Date Accounts and Explanation 2017 Debit Credit Dec. 31 0 More Info 2017 Aug. 1 Purchased equipment costing $22,000 by issuing a one-year, 6% note payable. Dec. 31 Accrued interest on the note payable. 2018 Aug. 1 Paid the note payable plus interest at maturity. Print Done Choose fro eck Answer nart

Answer 1

Solution: Credit Debit 22000 Date Accounts and Explanation Aug 1,2017 Equipment Notes Payable Purchased equipment in exchange for one-year, 6% note. 22000 550 550 Dec 31,2017 Interest Expense Interest Payable Accrued interest expense at year-end. (22000*6%*5/12) Aug 1,2018 Notes Payable Interest Payable Interest Expense=22000*6%*7/12 Cash Paid note and interest at maturity. 22000 550 770 23320