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.) Credit Sep 1, 2017: Purchased equipment costing $20,000 by issuing a one-year, 9% note payable. Date Accounts and Explanation Debit 2017 Sep. 1 Equipment Nates Payable 20,000 Notes Payable 20,000 Purchased equipment in exchange for one year, 9% note Dec 31, 2017: Accrued interest on the noto payable. . . .

Answer 1

date	accounts	debit	credit
sep 1 2018	Notes payable	20,000
	Interest expense	1200
	interest payable	600
	........To cash a/c		21,800
	paid note and interest at maturity)

working:

interest expense = $20,000 note value *9% interest rate * 8 months till september /12 months.