Exercise $4-18($Algo$)$ Notes payable$-$interest accrual and payment LO $4-6,4-7$

Proco had an account payable of $$5,800$ due to Shirmoo Incorporated, one of its suppliers. The amount was due to be paid on

January $31.$ Proco did not have enough cash on hand then to pay the amount due, so Proco's treasurer called Shirmoo's treasurer and

agreed to sign a note payable for the amount due. The note was dated February $1,$ had an interest rate of $9\%$ per annum, and was

payable with interest on May $31.$

Required:

a$.$ Use the horizontal model to show the effects $(+$ for addition and $-$ for subtraction$)$ of each of these transactions and adjustments for

Proco on the following:

February $1,$ to show that the account payable had been changed to a note payable.

March $31,$ to accrue interest expense for February and March.

May $31,$ to record payment of the note and all of the interest due to Shirmoo.

b$.$ Prepare the journal entries to show each of these transactions and adjustments.

Complete this question by entering your answers in the tabs below.

Required A

Use the horizontal model to show the effects $(+$ for addition and $-$ for subtraction$)$ of each of these transactions and adjustments for Proco on the following:

a$.$ February $1,$ to show that the account payable had been changed to a note payable.

b$.$ March $31,$ to accrue interest expense for February and March.

c$.$ May $31,$ to record payment of the note and all of the interest due to Shirmoo.