The following selected transactions relate to liabilities of United Insulation Corporation. Uniteds fiscal year ends on December

Question:

The following selected transactions relate to liabilities of United Insulation Corporation. United’s fiscal year ends on December 31.

Required:
Prepare the appropriate journal entries through the of each liability.
2011
Jan. 13 Negotiated a revolving credit agreement with Parish Bank that can be renewed annually upon bank approval. The amount available under the is $20 million at the bank's prime rate.
Feb. 1 Arranged a three-month bank loan of $5 million with Parish Bank under the agreement. Interest at the prime rate of 10% was payable at 1 Paid the 10% note at 1 Supported by the credit line, issued $10 million of commercial paper on a nine-month note. Interest was discounted at issuance at a 9% discount rate.
31 Recorded any necessary adjusting entry(s).

2012
Sept. 1 Paid the commercial paper at Line of Credit
A line of credit (LOC) is a preset borrowing limit that can be used at any time. The borrower can take money out as needed until the limit is reached, and as money is repaid, it can be borrowed again in the case of an open line of credit. A LOC is... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...