14. On November 1, 2018, Aviation Training Corp. borrows $45,000 cash from Commu
ID: 2516571 • Letter: 1
Question
14.
On November 1, 2018, Aviation Training Corp. borrows $45,000 cash from Community Savings and Loan. Aviation Training signs a three-month, 6% note payable. Interest is payable at maturity. Aviation’s year-end is December 31.
Required:
1., 2. & 3. 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.)
Journal entry worksheet
-Record the issuance of note.
-Record the adjustment for interest.
-Record the repayment of the note at maturity.
Explanation / Answer
Solution:
-Record the issuance of note.
Date
General Journal
Debit
Credit
Nov.1,2018
Cash
$45,000
Notes Payable
$45,000
-Record the adjustment for interest.
Date
General Journal
Debit
Credit
Dec.31, 2018
Interest Expense ($45,000*2 months /12 * 6%)
$450
Interest Payable
$450
-Record the repayment of the note at maturity.
Date
General Journal
Debit
Credit
At maturity
Interest Expense ($45,000*1 months /12 * 6%)
$225
Interest Payable
$450
Notes Payable
$45,000
Cash
$45,675
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Date
General Journal
Debit
Credit
Nov.1,2018
Cash
$45,000
Notes Payable
$45,000
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