North Face is one of the world's most popular outdoor apparel companies. Assume that North Face borrows $2 million from U.S. Bank and signs a note promising to pay the $2 million back in nine months, at which time North Face will also pay any accrued interest. The interest rate on the note is 8%.
Required:
1. Prepare the journal entry North Face will record when it signs the note and receives the cash.
2. Prepare the journal entry that North Face will record when it pays off the note and any accrued interest after nine months.