Answer:
1. On what date does this note mature? July 14
2-a. Prepare the entry to record issuance of the note.
May 15
Dr. Cash. 110,000
Cr. Notes Payable. 110,000
2-b. First, complete the table below to calculate the interest expense at maturity. Use those calculated values to prepare your entry to record payment of the note at maturity.
Interest Maturity
Principle 110,000
Rate 12%
Time 60/360
Total interest 2,200
General Journal
Dr. Interest Payable. 2,200
Dr. Notes Payable. 110,000
Cr. Cash 112,200
Based on the information given note maturity date is July 14 and the appropriate journal entries are:
1. The note maturity date is July 14.
2-a. Journal entry
May 15
Debit Cash $110,000
Credit Notes Payable $110,000
(To record issuance of note)
2-b. Interest Maturity
Principal=$110,000
Rate=12%
Time= 60/360
Total interest=$2,200
Debit Interest Payable $2,200
($110,000×12%×60/360)
Debit Notes Payable $110,000
Credit Cash $112,200
($2,200+$110,000)
(To record payment of note at maturity)
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