Kelly Jones and Tami Crawford borrowed $21,000 on a 7-month, 8% note from Gem St
ID: 2570567 • Letter: K
Question
Kelly Jones and Tami Crawford borrowed $21,000 on a 7-month, 8% 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
SHOW LIST OF ACCOUNTS
LINK TO TEXT
Date
Account Titles and Explanation
Debit
Credit
June 30
SHOW LIST OF ACCOUNTS
LINK TO TEXT
SHOW LIST OF ACCOUNTS
LINK TO TEXT
Date
Account Titles and Explanation
Debit
Credit
Jan. 1, 2018
Kelly Jones and Tami Crawford borrowed $21,000 on a 7-month, 8% 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
1.entry to record the receipt of the funds from the loan.
2. Prepare the entry to accrue the interest on June 30.
3.
Balance in interest payable account:
=21000×8%×7/12
=$980
4. entry required on January 1, 2018, when the loan is paid back.
June 1 Cash $21,000 Notes payable $21,000Related Questions
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