ezto.mheducation htt Homework #9 (Chpt 10) Assignments: ACTG 2010 WSU Spr 18 329

Question

ezto.mheducation htt Homework #9 (Chpt 10) Assignments: ACTG 2010 WSU Spr 18 32963 value 2.14 points E10-2 Recording a Note Payable through Its Time to Maturity [LO 10-2] Many businesses borrow money during periods of increased business activity to finance inventory and accounts receivable. Target Corporation is one of America's largest general merchandise retailers. Each Christmas, Target builds up its inventory to meet the needs of Christmas shoppers. A large portion of Christmas sales are on credit. As a result, Target often collects cash from the sales several months after Christmas. Assume that on November 1, 2015, Target borrowed $7.7 million cash from Metropolitan Bank and signed a promissory note that matures in six months. The interest rate was 7.50 percent payable at maturity. The accounting period ends December 31 Required: 1,283. Complete the required journal entries to record the note on November 1, 2015, interest on the maturity date, Apri 30, 2016, assuming that interest has not been recorded since December 31, 2015. (Enter your select "No Journal Entry Required" in the first account field.) answers in whole dollars. If no entry is required for a transaction/event View transaction list Record the borrowing of $7,700,000. Record the interest accrued on the note payable as of December 31, 2015 2 2015 3 Record the repayment of the note plus interest on the maturity date. Credit Note:-journal entry has been entered Clear

Explanation / Answer

01-Nov Cash 7700000           Notes payable 7700000 31-Dec Interest expense 96250 (7700000*7.5%*2/12)            Interest payable 96250 30-Apr Interest expense 192500 (7700000*7.5%*4/12) Interest payable 96250 Notes payable 7700000            Cash 7988750

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