Problem $8-2$A $($Algo$)$ Record notes payable and notes receivable $($LO$8-2)$

Precision Castparts, a manufacturer of processed engine parts in the automotive and airline industries, borrows $$40\mathrm{.}7$ million

cash on October $1,2024,$ to provide working capital for anticipated expansion. Precision signs a one$-$year, $9\%$ promissory note

to Midwest Bank under a prearranged short$-$term line of credit. Interest on the note is payable at maturity. Each company has a

December $31$ year$-$end.

Required:

Prepare the journal entries on October $1,2024,$ to record $($a$)$ the notes payable for Precision Castparts and $($b$)$ the notes

receivable for Midwest Bank.

Record the adjusting entry on December $31,2024,$ for $($a$)$ Precision Castparts and $($b$)$ Midwest Bank.

Prepare the journal entries on September $30,2025,$ to record payment of $($a$)$ the notes payable for Precision Castparts and

$($b$)$ the notes receivable for Midwest Bank.