Scudder Products, Inc. borrowed $ 600,000 by issuing a six- month note on September 1 of the

Question:

Scudder Products, Inc. borrowed $ 600,000 by issuing a six- month note on September 1 of the current year. The note is due on March 1 of the following fiscal year. The short- term note carries a 5% annual interest rate, with interest due at maturity. The company’s fiscal year ends on December 31. Prepare the journal entries on September 1 and December 31 of the current year.