Keesha Co. borrows $ 200,000 cash on November 1, 2013, by signing a 90-day, 9% note with

Question:

Keesha Co. borrows $ 200,000 cash on November 1, 2013, by signing a 90-day, 9% note with a of $ 200,000.
1. On what date does this note mature? (Assume that February of 2013 has 28 days.)
2. How much interest expense results from this note in 2013? (Assume a 360- day year.)
3. How much interest expense results from this note in 2014? (Assume a 360- day year.)
4. Prepare journal entries to record
(a) Issuance of the note,
(b) Accrual of interest at the end of 2013,
(c) Payment of the note at maturity.

Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...