Problem $2-$ NOTES PAYABLE

Vinyl Resting Place $($a local records store$)$ issued a note to Bonnie Tiler on March $1,2027,$ in exchange for inventory. The details of the note are below. Provide all of the required journal entries from issuance to derecognition$/$settlement$.$ Assume that the Vinyl Resting Place has a December $31$ year$-$end and that the company does not prepare interim statements.

Face value of note payable

Date of issue for note

Due date for note

Interest rate in the note

Market rate of interest

$$200,000$

March $1,2027$

May $1,2027$

$0\%$

$10\%$

$$ Enter debits as positive $($e$.$g$.,1000)$ and credits as negative $($e$.$g$.,-1000)$

$$ Do not use $

$$ Please do not round intermediary calculations.

$$ Round final answer to nearest dollar.

a$)$ Prepare the journal entry to record the issuance of the note on March $1,2027$

$\backslash$table$[[$ACCOUNT NAME,$\backslash$table$[[$Amount $($debits$],[$are positive,$],[$credits$],[$negative$)]]],[,],[,]]$

b$.$ Prepare the journal entries necessary to recognize the derecognition$/$settlement of the note on May $1,2027$

$\backslash$table$[[$ACCOUNT NAME,$\backslash$table$[[$Amount $($debits$],[$are positive,$],[$credits$],[$negative$)]]],[,]]$

Intermediate Financial Accounting II

$5|$Page

Midterm Review Package