C.S. Lewis Company had the following transactions involving notes payable. July
ID: 2748858 • Letter: C
Question
C.S. Lewis Company had the following transactions involving notes payable.
July 1, 2015 Borrows $51,000 from First National Bank by signing a 9-month, 8% note.
Nov. 1, 2015 Borrows $61,800 from Lyon County State Bank by signing a 3-month, 6% note.
Dec. 31, 2015 Prepares adjusting entries.
Feb. 1, 2016 Pays principal and interest to Lyon County State Bank.
Apr. 1, 2016 Pays principal and interest to First National Bank. Prepare journal entries for each of the transactions.
Question: Prepare journal entries for each of the transactions. Prepare answer in chart
Date Account titles and explanation Debit Credit July 1, 2015 Nov 1, 2015 Dec 31. 2015 (Adjusting Entry for First National Bank Note) Dec. 31,2015 (Adjusting entry for Lyon County State Bank Note Feb. 1, 2016 Apr. 1,2016Explanation / Answer
Solution:
Date
Account titles and explanation
Debit
Credit
July 1, 2015
Cash
51000
First National Bank
51000
Nov 1, 2015
Cash
61800
Lyon County State Bank
61800
Dec 31. 2015
Interest
2040
Interest Payable
2040
(Adjusting Entry for First National Bank Note)
(51000*.08*6/12)
Dec. 31,2015
Interest
618
Interest Payable
618
(Adjusting entry for Lyon County State Bank Note
(61800*.06*2/12)
Feb. 1, 2016
Lyon County State Bank
61800
Interest (61800*.08*1/12)
309
Interest Payable
618
cash
62727
Apr. 1,2016
First National Bank
51000
Interest (51000*.06*3/12)
1020
Interest Payable
2040
cash
54060
Date
Account titles and explanation
Debit
Credit
July 1, 2015
Cash
51000
First National Bank
51000
Nov 1, 2015
Cash
61800
Lyon County State Bank
61800
Dec 31. 2015
Interest
2040
Interest Payable
2040
(Adjusting Entry for First National Bank Note)
(51000*.08*6/12)
Dec. 31,2015
Interest
618
Interest Payable
618
(Adjusting entry for Lyon County State Bank Note
(61800*.06*2/12)
Feb. 1, 2016
Lyon County State Bank
61800
Interest (61800*.08*1/12)
309
Interest Payable
618
cash
62727
Apr. 1,2016
First National Bank
51000
Interest (51000*.06*3/12)
1020
Interest Payable
2040
cash
54060
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