Question: Problem 8-2A Record notes payable and notes receivable (LO8-2) [The following information applies to the questions displayed below.] Precision Castparts, a manufacturer of processed engine
Problem 8-2A Record notes payable and notes receivable (LO8-2)
[The following information applies to the questions displayed below.]
Precision Castparts, a manufacturer of processed engine parts in the automotive and airline industries, borrows $39.1 million cash on October 1, 2021, 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 firm has a December 31 year-end.
1. Prepare the journal entries on October 1, 2021, to record the issuance of the note. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions. For example, $5.5 million should be entered as 5,500,000.)
| Date | General Journal | Debit | Credit |
| October 01, 2021 | |||
2) Record the acceptance of the notes by midwest bank
| Date | General Journal | Debit | Credit |
| October 01, 2021 | |||
2. Record the adjustments on December 31, 2021, for (a) Precision Castparts and (b) Midwest Bank. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions. For example, $5.5 million should be entered as 5,500,000.)
3)
| Date | General Journal | Debit | Credit |
| December 31, 2021 | |||
Record the adjusting entry for interest for Midwest Bank
| Date | General Journal | Debit | Credit |
| December 31, 2021 | |||
3. Prepare the journal entries on September 30, 2022, to record payment of the notes payable at maturity. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions. For example, $5.5 million should be entered as 5,500,000.)
| Date | General Journal | Debit | Credit |
| September 30, 2022 | |||
Record the receipt of cash at maturity for Midwest Bank
| Date | General Journal | Debit | Credit |
| September 30, 2022 | |||
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