On October 1, 2020, Carters, Inc. borrows $72,000 cash from First Bank and signs a promissory note that matures in eight months on May 31, 2021. The interest rate is 5 percent payable at maturity. Carters’ accounting period ends on December 31.

1. What is the maturity value of the note?

2. Prepare the journal entry to record the note on October 1, 2020.

3. Prepare the required adjusting entry to accrue interest on December 31, 2020,

4. Prepare the journal entry to record the payment of interest on the maturity date, May 31, 2021.

5. Prepare the journal entry to record the payment of the principal on the maturity date.

Answer rating: 100% (QA)

Answer 1 Principal Amount Interest Total Maturity ... View the full answer