The following selected transactions relate to liabilities of Rose Dish Corporation. Rose's fiscal year ends on December
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The following selected transactions relate to liabilities of Rose Dish Corporation. Rose's fiscal year ends on December 31.
2024 February 3 Negotiated a revolving credit agreement with Second Bank, which can be renewed annually upon bank approval. The amount available under the line of credit is $30,000,000 at the bank's prime rate. April 1 Arranged a 3-month bank loan of $12 million with Second Bank under the line of credit agreement. Interest at the prime rate of 8% was payable at maturity. July 1 Paid the 8% loan at maturity. November 1 Supported by the credit agreement, issued $20 million of commercial paper on a 9-month note. Interest was discounted at issuance at a 6% discount rate. December 31 Recorded any necessary adjusting entry(s). 2025 August 1 Paid the commercial paper at maturity. Required:
Prepare the appropriate journal entries through the maturity of each liability.
Related Book For
Financial Accounting
ISBN: 978-0078025549
3rd edition
Authors: J. David Spiceland, Wayne Thomas, Don Herrmann
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