On July 1, 2014, Kamer\'s Trinkets borrowed $23,000 from the bank. Kamer signed

Question

On July 1, 2014, Kamer's Trinkets borrowed $23,000 from the bank. Kamer signed a ten-month, 8% promissory note for the entire amount. Kamer's uses a calendar year-end.

Prepare the journal entry on July 1 to record the issuance of the promissory note.

Prepare any adjusting entries needed at year-end. Use months in calculation. Do not round intermediate calculations. If required, round your final answer to the nearest dollar.

Prepare the journal entry on May 1 to record the payment of principal and interest. If an amount box does not require an entry, leave it blank. Use months in calculation. Do not round intermediate calculations. If required, round your final answer to the nearest dollar.

Explanation / Answer

Jul-01 Cash A/c   Dr 23000    To Notes Payable for Loan 23000 Year end entry 23000*8%*6/12 920 Interest Dr 920    To Notes Payable 920

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