BUS $212-$ FINANCIAL REPORTING AND ANALYSIS $/$ HANDOUT $3$

Q$1.$ Botjen Corporation, whose fiscal year ends June $30,$ completed the following transactions involving notes payable:

May $11$ Signed a $90-$day, $12$ percent, $$66,000$ note payable to Shire Bank for a working capital loan. The face value included interest. Proceeds received were $$64,020.$

$21$ Obtained a $60-$day extension on an $$18,000$ trade account payable owed to a supplier by signing a $60-$day, $$18,000$ note. Interest is in addition to the face value, at the rate of $14$ percent.

June $30$ Made end$-$of$-$year adjusting entry to accrue interest expense on supplier note.

$30$ Made end$-$of$-$year adjusting entry to recognize interest accrued on bank note.

July $20$ Paid off the note plus interest due the supplier.

Aug. $9$ Paid amount due to the bank on the $90-$day note.

Prepare entries in journal form for the notes payable transactions.

Q$2.$ Csizczak Plywood Company, whose fiscal year ends December $31,$ completed the following transactions involving notes payable:

$20$X$1$

Nov. $25$ Purchased a new loading cart by issuing a $60-$day, $10$ percent note for $$21,600.$

Dec. $16$ Borrowed $$25,000$ from the bank to finance inventory by signing a $90-$day note. The face value of the note includes interest of $$750.$ Proceeds received were $$24,250.$

$31$ Made the end$-$of$-$year adjusting entry to accrue interest expense on cart note.

$31$ Made the end$-$of$-$year adjusting entry to recognize the interest accrued on the note to the bank.

$20$X$2$

Jan. $24$ Paid off the loading cart note.

Mar. $16$ Paid off the inventory note to the bank.

Prepare entries in journal form for these transactions.