Entries for notes payable Cosimo Enterprises issues a $260,000, 45-day, 5% note

Question

Entries for notes payable Cosimo Enterprises issues a $260,000, 45-day, 5% note to Dixon Industries for merchandise inventory. Assume a 360-day year. For a compound transaction, if an amount box does not require an entry, leave it blank a. Journalize Cosimo Enterprises' entries to record: 1. the issuance of the note. 2. the payment of the note at maturity. 1. 2. b. Journalize Dixon Industries' entries to record: 1. the receipt of the note. 2. the receipt of the payment of the note at maturity. 1. 2.

Explanation / Answer

a Merchandise inventory 260000         Notes payable 260000 Notes payable 260000 Interest expense 1625 =260000*5%/360*45         Cash 261625 b Notes receivable 260000        Sales revenue 260000 Cash 261625        Notes receivable 260000        Interest revenue 1625

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