On November 1, 2016, Quantum Technology, a geothermal energy supplier, borrowed

Question

On November 1, 2016, Quantum Technology, a geothermal energy supplier, borrowed $24 million cash to fund a geological survey. The loan was made by Nevada BancCorp under a noncommitted short-term line of credit arrangement. Quantum issued a nine-month, 11% promissory note. Interest was payable at maturity. Quantum's fiscal period is the calendar year. Required 1.Prepare the journal entry for the issuance of the note by Quantum Technology. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) view transaction list view general journal Journal Entry Worksheet Record the issuance of the note by Quantum Technology. Date November 01 2016 General Journal Debit Credit *Enter debits before credits done clear entry record entry

Explanation / Answer

1. Nov 1,2016

Bank a/c .... Dr $24 million

To 11% promissory note $24 million

2. Dec 31, 2016

Interest expense a/ .... Dr $440,000

To Interest payable a/c $440,000

Provision of interest expense for 2 months at 11%

3. July 31, 2017

Interest expenses a/c..... Dr $1540000

To interest payable a/c $1540000

Recognising the interest for remaining 7 months

11% promissory note a/c ..... Dr $24 million

Interest payable a/c ............Dr $1980000

To bank a/c $25980000

Being payment of amount along with interest on maturity

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.