Kelly Jones and Tami Crawford borrowed $19,333 on a 7-month, 9% note from Gem St
ID: 2570529 • Letter: K
Question
Kelly Jones and Tami Crawford borrowed $19,333 on a 7-month, 9% note from Gem State Bank to open their business, JC’s Coffee House. The money was borrowed on June 1, 2017, and the note matures January 1, 2018.
Date
Account Titles and Explanation
Debit
Credit
June 1
Date
Account Titles and Explanation
Debit
Credit
June 30
Balance in interest payable account
Date
Account Titles and Explanation
Debit
Credit
Jan. 1, 2018
Kelly Jones and Tami Crawford borrowed $19,333 on a 7-month, 9% note from Gem State Bank to open their business, JC’s Coffee House. The money was borrowed on June 1, 2017, and the note matures January 1, 2018.
Explanation / Answer
Journal entry ;
Balance on dec 31,2017 interest payable account is (19333*9%*7/12)=1015
date accounts & explanation debit credit June 1,2017 cash a/c 19333 Notes payable a/c 19333 (TO record amount borrowed) june 30,2017 Interest expenses a/c (19333*9%*1/12) 145 Interest payable a/c 145 (To record accured interest) 2018 Jan 1 Notes payable a/c 19333 Interest payable a/c (19333*9%*7/12) 1015 Cash a/c 20348 (To record amount paid on maturity)Related Questions
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