Kelly Jones and Tami Crawford borrowed $13,800 on a 7-month, 10% note from Gem S
ID: 2577148 • Letter: K
Question
Kelly Jones and Tami Crawford borrowed $13,800 on a 7-month, 10% 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
Date
Account Titles and Explanation
Debit
Credit
Jan. 1, 2018
Open Show Work
Kelly Jones and Tami Crawford borrowed $13,800 on a 7-month, 10% 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
June 1 Cash 13800 Notes payable 13800 Jun-30 Interest expense 115 =13800*10%/12*1 Interest payable 115 Balance in interest payable account = 115*7= 805 Jan. 1 Notes payable 13800 Interest payable 805 Cash 14605
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