On March 1, Baten Company borrows $90,000 from North Country bank by signing a 6 month, 8% interest bearing note.

Instructions:

Prepare the necessary General Journal Entries associated with the note payable on the books of Baten Company. No explanation is required.

1. Prepare the entry on March 1, when the note was issued.

2. Prepare any adjusting entries necessary on June 30 in order to prepare the semi annual financial statements. Assume no other interest accrual entries have been made.

3. Prepare the adjusting entry at August 31 to accrue interest.

4. Prepare the entry to record payemtn of the note at maturity.

Debit-Cash 90,000
Credit-Short term note payble 90,000

Debit-Interest Expense 2,400 (assuming a basic monthly calculation)
Credit-Accrued Interest 2,400

Debit-Interest Expense 1,200
Credit-Accrued Interest 1,200

Debit-Accrued Interest 3,600
Debit-STNP 90,000
Credit-Cash 93,600