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    weatherford4's Avatar
    weatherford4 Posts: 5, Reputation: 1
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    #1

    Sep 13, 2007, 07:14 AM
    General Journal entry
    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.
    CottonM's Avatar
    CottonM Posts: 3, Reputation: 1
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    #2

    Sep 13, 2007, 02:17 PM
    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
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