-e | ezto.mheducation.com/hm.tpx Case C Question 1 value 4.50 points Nicole thin

Question

-e | ezto.mheducation.com/hm.tpx Case C Question 1 value 4.50 points Nicole thinks that her business, Nicole's Getaway Spa (NGS), is doing realy well and she is planning a large expansion. With such a large expansion, Nicole will need to finance some of it using debt She signed a one-year note payable with the bank for $40,000 with a 5 percent interest rate. The note was issued October 1, 2014 interest is payable semiannually; and the end of Nicole's accounting period is December 31 Required: Prepare the journal entries required from the issuance of the note unal ts maturity on September 30, 2015 assuming that no entries are made other than at the end of the accounting period, when interest is payable, and when the note reaches its maturity, (If no entry is required for a transactionlevent, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.) View transaction list Journal entry worksheet Record the borrowing of $40,000. Note: Enter debits before credits. Date General Journal Debit Credit October 01, 2014 Record entry Clear entry View general journal 0 Type here to search

Explanation / Answer

Date General Journal Debit Credit 1 October 1, 2014 Cash 40000 Note payable 40000 (To record the borrowing) 2 December 31, 2014 Interest expense 500 Interest payable 500 ($40000 x 5% x 3/12) (To record accrued interest) 3 March 31, 2015 Interest payable 500 Interest expense 500 Cash 1000 (To record interest payment) 4 September 30, 2015 Interest expense 1000 Cash ($40000 x 5% x 6/12) 1000 (To record interest payment) 5 September 30, 2015 Note payable 40000 Cash 40000 (To record repayment of note on maturity)

Related Questions

Navigate

• Browse (All)
• Browse #
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.