2 value 2.00 points Many businesses borrow money during periods of increased bus

Question

2 value 2.00 points 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 $6.1 million cash from Metropolitan Bank and signed a promissory note that matures in six months. The interest rate was 8.50 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, April 30, 2016, assuming that interest has not been recorded since December 31, 2015. (Enter your answers in whole dollars. If no entry is required for a transaction/event, select "No Journal Entry Required in the first account field.) View transaction list Journal entry worksheet Record the borrowing of $6,100,000. Note: Enter debits before credits Date Navember 01, 2015 General Journal Debit Credit Record entry Clear entry View general journal

Explanation / Answer

Journal entry :

Date accounts & explanation debit credit 2015, Nov 1 Cash a/c 6100000 Notes payable a/c 6100000 (to record amount borrowed) 2015, dec 31 Interest expenses a/c 86417 Interest payable a/c 86417 (To record accured interest) 2016, Apr 30 Notes payable a/c 6100000 Interest payable a/c 86417 Interest expenses a/c 172833 Cash a/c 6359250 (To record maturity of notes)

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