Kwon Co. borrows $150,000 cash on November 1, 2011, by signing a 90-day, 9% note with a face value of $150,000.
1.On what date does this note mature? (Assume that February of 2011 has 28 days.)
2.How much interest expense results from this note in 2011? (Assume a 360-day year.)
3.How much interest expense results from this note in 2012? (Assume a 360-day year.)
4.Prepare journal entries to record (a) issuance of the note, (b) accrual of interest at the end of 2011, and (c) payment of the note at maturity.
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