On June 1, Fancher Company Ltd. borrows $180,000 from First Bank on a 6-month, $

Question

On June 1, Fancher Company Ltd. borrows $180,000 from First Bank on a 6-month, $180,000, 6% note. The note matures on December 1.

Prepare the entry on June 1. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date

Account Titles and Explanation

Debit

Credit

June 1

    2. Prepare the adjusting entry on June 30. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date

Account Titles and Explanation

Debit

Credit

June 30

3. Prepare the entry at maturity (December 1), assuming monthly adjusting entries have been made through November 30. (Credit account titles are automatically indented when amount is entered. Do not indnt manually.)

Date

Account Titles and Explanation

Debit

Credit

Dec. 1

4. What was the total financing cost (interest expense)?

Total interest expense

$

Date

Account Titles and Explanation

Debit

Credit

June 1

Explanation / Answer

01-Jun Cash 180000         To 6% Note Payable 180000 30-Jun Interest Exp 900        To 6% Note Payable 900 (180000*6%/12) Dec-01 6% Note Payable 5400           To Cash 5400 Total Financing Cost 180000*6%/12*6 5400

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