Problem

(L.OBJ. 1) Accounting for a note payable [10 min] On August 31, 2010, Gordon Co. purcha...

(L.OBJ. 1) Accounting for a note payable [10 min]

On August 31, 2010, Gordon Co. purchased $7,000 of inventory on a one-year 12% note payable.

Requirements

1. Journalize the company’s accrual of interest expense on February 28, 2011, their fiscal year-end.

2. Journalize the company’s payment of the note plus interest on August 31, 2011.

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