On June 1, Moon Company determined that it would not be able to pay the account receivable that it was due to pay Gamma Company on that date. Moon was confident that it would have the necessary cash early in the next year. It therefore signed a nine-month, 9% note for the $14,000 that it owed. The interest on this note will be paid when the note matures. Gamma Company's fiscal year end is June 30.
Required:
a. Prepare Gamma's journal entries in June for this note.
b. Prepare Gamma's journal entry (or entries) to record the receipt of the full amount owed on March 1.