19. Many busines ses \"uw money unng penuds o n reased business acuv? y o fire n

Question

19. Many busines ses "uw money unng penuds o n reased business acuv? y o fire n? "'vont ry and au urts recuvable Nus cr h a h ws 's one u America's 'n s prestigious rela ers ach "isun s season esto' Mathews builds up its invcntory to mect the necds of Christmas shoppers. A large portion of these Christmas sales are on credit. As a resulL Nestor Matthews oflcn collects cash from the sales several months alter Christmas. Assume that on November 1 of this year, Nestor Matthews borrowed $5.4 million cash rom Bank of Georgia to meet short term obligations. Nestor Matthews signcd an interest bcaring note and promiscd to ropay the $5.4 million in six months. The annual interest rate was 5%. ?" nterest will accrue and be pad when the note is due in six months. Nestor Matthews accounting po od ends occm ber 31. Required: 1. Prepare the joumal entry to record the note on November 1, (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 not in millions (i.e, 1,000,000 not 1.0).) View transaction list View journal entry worksheet No Date General Journal Debit Credit November 01 Cash Ncte payable

Explanation / Answer

JOURNAL ENTRIES DATE ACCOUNTS TITLE AND EXPLANATIONS DEBIT $ CREDIT $ 1-Nov Cash Account Dr. 5,400,000        Notes payable 5,400,000 31-Dec Interest expense Dr. (5400,000*5%*2/12) 45000           Interest payable Account 45000 30-Apr Notes payable Dr. 5,400,000 Interest payable Dr. 45000 Interest expense Accoount Dr. (5400,000*5%*4/12) 90000         Cash Account 5,535,000

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

---

---

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