Ellsworth Enterprises borrowed $425,000 on an 8%, interest-bearing note on September 30, 2020. Ellsworth ends its fiscal

Question:

Ellsworth Enterprises borrowed $425,000 on an 8%, interest-bearing note on September 30, 2020. Ellsworth ends its fiscal year on December 31. The note was paid with interest on March 31, 2021.
Required:
1. Prepare the entry for this note on September 30, 2020.
2. Prepare the adjusting entry for this note on December 31, 2020.
3. Indicate how the note and the accrued interest would appear on the at December 31, 2020.
4. Prepare the entry to record the repayment of the note on March 31, 2021.
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...