Question

C.S. Cullumber Company had the following transactions involving notes payable. July 1, 2022 Nov. 1, 2022 Dec 31, 2022 Feb. 1, 2023 Apr 1, 2023 Borrows $74,000 from First National Bank by signing a 9-month, 8% note. Borrows 577,000 from Lyon County State Bank by signing a 3-month, 6% note. Prepares adjusting entries. Pays principal and interest to Lyon County State Bank, Pays principal and interest to First National Bank Prepare journal entries for each of the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent Date Account Titles and Explanation Debit Credit (To record accrual of interest from First National Bank) (To record accrual of interest from Lyon County State Bank)

Answer 1

Journal entry

date	account and explanation	Debit	Credit
July 1	Cash	74000
	Notes payable-First national bank		74000
Nov 1	Cash	77000
	Notes payable-Lyon country state bank		77000
Dec 31	Interest expense (74000*8%*6/12)	2960
	Interest payable		2960
	(to record accrued interest)
	Interest expense (77000*6%*2/12)	770
	Interest payable		770
	(To record accrued interest)
Feb 1	Notes payable-Lyon country state bank	77000
	Interest payable	770
	Interest expense	385
	Cash		78155
	(To record amount paid)
Apr 1	Notes payable-First national bank	74000
	Interest payable	2960
	Interest expense	1480
	Cash		78440
	(To record amount paid)