A business issued a 45-day, 4% note for $265,000 to a creditor on account. Journ

Question

A business issued a 45-day, 4% note for $265,000 to a creditor on account.

Journalize the entries to record (a) the issuance of the note on January 1 and (b) the payment of the note at maturity, including interest. Assume a 360-day year. Refer to the Chart of Accounts for exact wording of account titles.

a. Journalize the entries to record the issuance of the note on January 1. Refer to the Chart of Accounts for exact wording of account titles.

b. Journalize the entries to record the payment of the note at maturity, including interest. Assume a 360-day year and round amounts to the nearest whole dollar. Refer to the Chart of Accounts for exact wording of account titles.

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JOURNAL

ACCOUNTING EQUATION

Score: 15/37

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CHART OF ACCOUNTSGeneral Ledger

DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY

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Explanation / Answer

Date Description Post Ref. Debit Credit Assets Liability Equity Jan-01 Accounts Payable 2,65,000.00 -2,65,000.00 Notes Payable 2,65,000.00    2,65,000.00 Feb-15 Interest Expenses         1,325.00 -1,325.00 Interest Payable        1,325.00          1,325.00 Feb-15 Notes Payable -2,65,000.00 Interest Payable        -1,325.00 Cash -2,66,325.00

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