Exercise 11-1 C.S. Lewis Company had the following transactions involving notes

Question

Exercise 11-1 C.S. Lewis Company had the following transactions involving notes payable. uly 1, 2017 Borrows $50,500 from First National Bank by signing a 9-month, 8% note. No. 1, 2017 Borrows $64,000 from Lyon County State Bank by signing a 3-month, 6% note. Dec. 31, 2017 Prepares adjulting entries. Feb. 1, 2018 Pays principal and interest to Lyon County State Bank Apr. 1, 2018 Pays principal and interest to First National Bank. Prepare entered. Do not indent manually. ournal entries for each of the transactions. (Credit account titiles are automatically indented when amount is 201i Round answers to 0 decimal places, e.g. S,275. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit (Adjusting entry for First National Bank note-) 9 K.

Explanation / Answer

JOURNAL ENTRIES:

Jul-01 Dr. Cash 50,500 Cr. Notes payable (First National) 50,500 Sep-30 Dr. Interest expense 1010 Cr. Interest payable (First National) 1010 (50,500 * 8% *3/12) Nov-01 Dr. Cash 64,000 Cr. Notes payable (Lyon County) 64,000 Dec-31 Dr. Interest expense 1010 Cr. Interest payable (First National) 1010 (50,500 * 8% *3/12) Dec-31 Dr. Interest expense 640 Cr. Interest payable (Lyon County) 640 (64,000 * 6% * 2/12) Feb-01 Dr. Notes Payable (Lyon County) 64,000 Dr. Interest payable (Lyon County) 640 Dr. Interest expense 320 Cr. Cash 64,960 Mar-01 Dr. Interest expense 1010 Cr. Interest payable (Lyon County) 1010 Apr-01 Dr. Notes payable (First National) 5050 Dr. Interest payable (First National) 3030 Cr. Cash 8080

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