Question 2 VERSION BACK NEXT NMENT RESOURCES 1- due 1216 C.S. Lewis Company had
ID: 2588024 • Letter: Q
Question
Question 2
VERSION BACK NEXT NMENT RESOURCES 1- due 1216 C.S. Lewis Company had the following transactions involving notes payable. July 1, 2017 Borrows $54,500 from First National Bank by signing a 9-month, 8% note. Nov. 1, 2017 Borrows $61,000 from Lyon County State Bank by signing a 3-month, 6% note. Dec. 31, 2017 Prepares adjusting entries. ew Results by Study ctive Feb. 1, 2018 Pays principal and interest to Lyon County State Bank Apr. 1, 2018 Pays principal and interest to First National Bank. indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,275. Record journal entries in the order presented in the Debit Ask me
Explanation / Answer
Date
General description
Debit
Credit
July 1 2017
Borrows $54,500 from first National Bank by signing a 9 month 8% note
cash
$54,500
Notes Payable
$54,500
Nov 1 2017
Borrows $61,000 from lyon county state Bank by signing a 3 month, 6% note
cash
$61,000
Notes Payable
$61,000
Dec 31 2017
Adjusting entries
Interest expense
$2,790
Interest Payable
$2,790
Feb1 2018
Pays principal and interest to lyon county state Bank
Notes Payable
$54,500
Interest Payable(54500*8%*6/12)
$2,180
Interest expense (54500*8%*3/12)
$1,090
Cash
$57,770
April1 2018
Pays principal and interest to First national Bank
Notes Payable
$61,000
Interest Payable ($61,000*6%*2/12)
$610
Interest expense ($61,000*6%*1/12)
$305
Cash
$61,915
Exercise 11-2
Date
General description
Debit
Credit
Jun-01
Cash
141000
Notes Payable
141000
Jun-30
Prepare adjusting entry
Interest expense
940
Interest Payable
940
(141,000*8%*1/12)
Date
General description
Debit
Credit
July 1 2017
Borrows $54,500 from first National Bank by signing a 9 month 8% note
cash
$54,500
Notes Payable
$54,500
Nov 1 2017
Borrows $61,000 from lyon county state Bank by signing a 3 month, 6% note
cash
$61,000
Notes Payable
$61,000
Dec 31 2017
Adjusting entries
Interest expense
$2,790
Interest Payable
$2,790
Feb1 2018
Pays principal and interest to lyon county state Bank
Notes Payable
$54,500
Interest Payable(54500*8%*6/12)
$2,180
Interest expense (54500*8%*3/12)
$1,090
Cash
$57,770
April1 2018
Pays principal and interest to First national Bank
Notes Payable
$61,000
Interest Payable ($61,000*6%*2/12)
$610
Interest expense ($61,000*6%*1/12)
$305
Cash
$61,915
Exercise 11-2
Date
General description
Debit
Credit
Jun-01
Cash
141000
Notes Payable
141000
Jun-30
Prepare adjusting entry
Interest expense
940
Interest Payable
940
(141,000*8%*1/12)
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