I am preparing adjusting entries for dec 31

1) on nov 1, jay borrowed $9,000 from yorkville bank issuing a 90 day, 10% note.

2) on dec 1, jay gave laura palmer a 60 day, 12% note for $6000 on account.

i wrote: cash 9,000
n/p 9,000

2) a/r 6,000
n/r 6,000

is this correct?

CaptainForest

Hello Aman,

As for number 1.

You got the correct entry for Nov. 1
Dr. Cash 9,000
Cr. N/P 9,000

At Dec. 31 though, you must adjust for accrued interest expense, how do you think you will do that?

As for number 1.
On Dec. 1, you entry would be:
Dr. N/R 6,000
Cr. Cash 6,000

Why? b/c you are GIVING them cash.

At Dec. 31, you must accrue interest earned, how do you think you will do that?


Note: Add in Dr. and Cr in your journal entries, it will make it easier to follow.