An August 1, 2015, Trico Technologies, an aeronautic electronics company, borrow

Question

An August 1, 2015, Trico Technologies, an aeronautic electronics company, borrows $19.4 million cash to expand operations. The loan is made by FirstBanc Corp. Under a short-term line of credit arrangement. Trico signs a six-month, 9% promissory note. Interest is payable at maturity. Trico's year-end is December 31. Record the necessary entries in the Journal Entry Worksheet below. (If no entry is required for a transaction/event. select "No journal entry required" in the first account field. Enter your answers in dollars, not in millions)

Explanation / Answer

1-Aug Cash Dr 19400000         9% notes payable Cr 19400000 (To record issuance of note) 31-Dec Interest expense Dr 727500            Interest payable Cr 727500 ( to record interest expense 19.4 million * 9%/12*5)

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