Kwon Co. borrows $150,000 cash on November 1, 2011, by signing a 90-day, 9% note

Question

Kwon Co. borrows $150,000 cash on November 1, 2011, by signing a 90-day, 9% note with a face value of $150,000.

Prepare journal entries to record accrual of interest at the end of 2011.(Use 360 days a year. Do not round intermediate calculations and round your final answer to the nearest dollar amount. Omit the "$" sign in your response.)

Prepare journal entries to record payment of the note at maturity.(Use 360 days a year. Do not round intermediate calculations and round your final answer to the nearest dollar amount. Omit the "$" sign in your response.)

Kwon Co. borrows $150,000 cash on November 1, 2011, by signing a 90-day, 9% note with a face value of $150,000.

Explanation / Answer

4(b) Prepare journal entries to record accrual of interest at the end of 2011. Interest expense Dr. 2250 (150000*.09*60/360) Interest payable Cr. 2250 4(c) Prepare journal entries to record payment of the note at maturity. Interest expense Dr. 1125 (150000*.09*30/360) Interest payable Dr. 2250 Notes payable Dr. 150,000 Cash Cr. 153775

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