Question: Perez Company borrowed 100 000 from the First National Bank on

Perez Company borrowed $100,000 from the First National Bank on April 1, 2011, on a three- year, 7.8 percent note. Interest is paid annually on April 1.

1. Record the borrowing transaction in Perez’s journal.
2. Prepare the adjusting entries made at December 31, 2011 and 2012.
3. Prepare the necessary journal entry to recognize the first interest payment on April 1, 2012.
4. Indicate how the note and associated interest would be presented in Perez’s December 31, 2012, balance sheet.
5. Prepare the necessary journal entries to record the repayment of the note and the last year’s interest payment on April 1, 2014.

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  • CreatedSeptember 22, 2015
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