Question 4 (of 4) 4. value: 25.00 points CC10-1 Accounting for Debt Financing [L

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Question 4 (of 4) 4. value: 25.00 points CC10-1 Accounting for Debt Financing [LO 10-2] Nicole thinks that her business, Nicole's Getaway Spa (NGS), is doing really well and she is planning a large expansion. With such a large expansion, Nicole will need to finance some of it using debt. She signed a one-year note payable with the bank for $53,000 with a 6 percent interest rate. The note was issued October 1, 2014; interest is payable semiannually; and the end of Nicole's accounting period is December 31. Required Prepare the journal entries required from the issuance of the note until its maturity on September 30, 2015, assuming that no entries are made other than at the end of the accounting period, when interest is payable, and when the note reaches its maturity. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.) View transaction list Journal entry worksheet Record the borrowing of $53,000. Note: Enter debits before credits.

Explanation / Answer

Journal Entries (Amounts in $)

No. Date General Journal Debit Credit 1 Oct. 1, 2014 Cash 53,000 Notes Payable 53,000 2 Dec. 31, 2014 Interest Expense ($53,000*6%*3/12) 795 Accrued Interest 795 3 Mar. 31, 2015 Interest Expense (Jan to Mar) 795 Accrued Interest 795 Cash ($53,000*6%*6/12) 1,590 4 Sept. 30, 2015 Interest Expense ($53,000*6%*6/12) 1,590 Cash 1,590 5 Sept. 30, 2015 Notes Payable 53,000 Cash 53,000

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