Exercise 10-1 Kelly Jones and Tami Crawford borrowed $26,000 on a 7-month, 6% no
ID: 2514779 • Letter: E
Question
Exercise 10-1
Kelly Jones and Tami Crawford borrowed $26,000 on a 7-month, 6% note from Gem State Bank to open their business, JC’s Coffee House. The money was borrowed on June 1, 2017, and the note matures January 1, 2018.
Date
Account Titles and Explanation
Debit
Credit
June 1
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Date
Account Titles and Explanation
Debit
Credit
June 30
SHOW LIST OF ACCOUNTS
LINK TO TEXT
SHOW LIST OF ACCOUNTS
LINK TO TEXT
Date
Account Titles and Explanation
Debit
Credit
Jan. 1, 2018
Exercise 10-1
Kelly Jones and Tami Crawford borrowed $26,000 on a 7-month, 6% note from Gem State Bank to open their business, JC’s Coffee House. The money was borrowed on June 1, 2017, and the note matures January 1, 2018.
Prepare the entry to record the receipt of the funds from the loan. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)Date
Account Titles and Explanation
Debit
Credit
June 1
SHOW LIST OF ACCOUNTS
LINK TO TEXT
Prepare the entry to accrue the interest on June 30. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)Date
Account Titles and Explanation
Debit
Credit
June 30
SHOW LIST OF ACCOUNTS
LINK TO TEXT
Assuming adjusting entries are made at the end of each month, determine the balance in the interest payable account at December 31, 2017.Balance in interest payable account $
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LINK TO TEXT
Prepare the entry required on January 1, 2018, when the loan is paid back. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)Date
Account Titles and Explanation
Debit
Credit
Jan. 1, 2018
Explanation / Answer
Journal entry :
Balance in interest payable account in december 31,2017 = 130*7 = 910
Date accounts & explanation debit credit June 1,2017 Cash 26000 Notes payable 26000 (To record amount borrowed) June 30,2017 Interest expense (26000*6%*1/12) 130 Interest payable 130 (To record accured interest)Related Questions
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