Continue with the same $10,000, 3-year, 6% note. This time, assume that the loan started on October 1, 2022. Prepare the journal entries as indicated. The note will be repaid on October 1, 2025.

Date	Account	Debit	Credit
	Entry for borrowing
10/1/22
	Adjusting entry for 2022 interest
12/31/22
	Adjusting entry for 2023 interest
12/31/23
	Adjusting entry for 2024 interest
12/31/24
	Repayment entry for 10/1/25
10/1/25

Example 3) On January 1, 2022, borrow $10,000 at 6% for three years Repayment will be January 1, 2025 Total interest =10,0006%3=$1,800 [Interest is 600 per year for each of the three years Not $600 spread over three years] Date Borrowed: Dr Cash* 10,000 Cr Notes Payable* 10,000 "Can be another asset-ie buy equipment and take out a loan 12/31/22 Adjusting Entry Dr Interest Expense 600 Cr Interest Payable 600 2022 Income Statement: $600 Interest Expense 12/31/22 Balance Sheet: Long Term Liabilities Notes Payable $10,000 Interest Payable 600 12/31/23 Adjusting Entry Dr Interest Expense 600 Cr Interest Payable 600 2023 Income Statement: $600 Interest Expense 12/31/23 Balance Sheet: Long Term Liabilities Notes Payable $10,000 Interest Payable 1,200 12/31/24 Adjusting Entry Dr lnterest Expense 600 Cr Interest Payable 600 2024 Income Statement: $600 Interest Expense 12/31/24 Balance Sheet: Leng Tefm Liabilities Move to Current Liabilities Notes Payable $10,000 Interest Payable 1,800 Jan 1, 2025 Repayment Entry