unearned sel VI Exercise 11-3 Sylvestor Systems borrows $110,000 cash on May 15,

Question

unearned sel VI Exercise 11-3 Sylvestor Systems borrows $110,000 cash on May 15, 2017, by signing a 60-day, 12% note Accounting for note 1. On what date does this note mature? payable P1 2. Suppose the face value of the note equals $110,000, the principal of the loan. Prepare the journal Check (2b) Interest tries to record (a) issuance of the note and (b) payment of the note at maturity. a. expense, $2,200 Keesha Co. borrows $200,000 cash on November 1, 2017, by signing a 90-day, 9% note with a face value of $200,000. 1. On what date does this note mature? 2. How much interest expense results from this note in 2017? (Assume a 360-day year.) 3. How much interest expense results from this note in 2018? (Assume a 360-day year.) 4. Prepare journal entries to record (a) issuance of the note, (b) accrual of interest at the end of 2017,and Exercise 11-4 Interest-bearing notes payable with year-end adjustments P1 Check (2) $3,000 (c) payment of the note at maturity. (Assume no reversing entries are made.)

Explanation / Answer

11-3

1 Maturity date (16+30+14) 14-Jul 2 a Cash 110000         Notes payable 110000 b Notes payable 110000 Interest expense 2200 (110000*12%*60/360)          Cash 112200

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