Jenny Kane and Cindy Travis borrowed $15,000 on a 7-month, 8% note from Golden State Bank to
Question:
Jenny Kane and Cindy Travis borrowed $15,000 on a 7-month, 8% note from Golden State Bank to open their business, KT’s Coffee House. The money was borrowed on June 1, 2014, and the note matures January 1, 2015.
Instructions
(a) Prepare the entry to record the receipt of the funds from the loan.
(b) Prepare the entry to accrue the interest on June 30.
(c) Assuming adjusting entries are made at the end of each month, determine the balance in the interest payable account at December 31, 2014.
(d) Prepare the entry required on January 1, 2015, when the loan is paid back.
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Step by Step Answer:
2014 a June 1 Cash 15000 Notes Payable 15000 b June 30 Interest Expense 15000 X 08 X 11...View the full answer
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Related Book For 
Accounting Tools for Business Decision Making
ISBN: 978-1118128169
5th edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
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