Exercise 1. Current Liabilities - Journal Entries for Various Transactions: 1. Short-Term Note Payable Issued at Face Value: a. On 10/1 Year 7 a corporation purchased EQUIPMENT /by issuing a one-year (i.e., 12 months), $42,000 face amount, 6% NOTE PAYABLE. Phrase Account Category Affect Dr. or Cr. 1st: 2nd: AL SE RE contra + - Dr Cr AL SE RE contra + Dr Cr Date Accounts Debit Credit b. On 12/31 Year 7, at fiscal year-end, INTEREST EXPENSE on the 6% note payable / is accrued to INTEREST PAYABLE. (Use months to calculate interest.) Calculation of INTEREST EXPENSE at 12/31 Year 7: Phrase 1st: 2nd: $ Principal Account X Rate X Time = X .06 X INTEREST EXPENSE = $ Category Affect Dr. or Cr. AL SE RE contra + - Dr Cr AL SE RE contra + Dr Cr Date Accounts Debit Credit