Brief Exercise 10-2 Sandhill Co. borrows $64,000 on July 1 from the bank by sign

Question

Brief Exercise 10-2 Sandhill Co. borrows $64,000 on July 1 from the bank by signing a $64,000, 10%, one-year note payable. (a) (b) Prepare the journal entry to record the proceeds of the note Prepare the journal entry to record accrued interest at December 31, assuming adjusting entries are made only at the end of the year. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit

Explanation / Answer

Note : The Period of 6 Months = July 1 to December 31

Date Account Titles and Explanation Debit Credit July 1 Cash $ 64,000 Notes Payable $ 64,000 December 31 Interest Expense ( $ 64,000 * 10% * 6/12) $ 3,200 Interest Payable $ 3,200

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