During 2021, Royal Co. borrowed cash from Struck Company by issuing notes payable as follows:

1. June 1, 2021, issued an eight-month, 6% note for $85,000. Interest and principal are payable at maturity.

2. October 1, 2021, issued a three-month, 5% note for $60,000. Interest is payable monthly on the first day of the month. Principal is payable at maturity.

Royal has a November 30 fiscal year end and prepares adjusting entries on an annual basis.

Instructions

a. Prepare all necessary journal entries for Royal to record the notes.

b. Prepare all necessary interest payment transactions for Royal in 2021 and 2022. Prepare separate adjusting entries for each note.