Eskimo Joes, designer of the worlds second best-selling T-shirt (just behind Hard Rock Cafe), borrows $21 million

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Eskimo Joe’s, designer of the world’s second best-selling T-shirt (just behind Hard Rock Cafe), borrows $21 million cash on November 1, 2024. Eskimo Joe’s signs a six-month, 7% promissory note to Stillwater National Bank under a prearranged short-term line of credit. Interest on the note is payable at maturity. Each company has a December 31 year-end.


Required:
1. Prepare the journal entries on November 1, 2024, to record (a) the notes payable for Eskimo Joe’s and (b) the notes receivable for Stillwater National Bank.
2. Record the adjusting entry on December 31, 2024, for (a) Eskimo Joe’s and (b) Stillwater National Bank.
3. Prepare the journal entries on April 30, 2025, to record payment of (a) the notes payable for Eskimo Joe’s and (b) the notes receivable for Stillwater National Bank.

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Financial Accounting

ISBN: 9781260786521

6th Edition

Authors: David Spiceland

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