Takemoto Corporation borrowed $60,000 on November 1, 2014, by signing a $61,350,

Question

Takemoto Corporation borrowed $60,000 on November 1, 2014, by signing a $61,350, 3-month, zero-interest-bearing note. Prepare Takemoto’s November 1, 2014, entry; the December 31, 2014, annual adjusting entry; and the February 1, 2015, entry. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date              Account Titles and Explanation       Debit       Credit

11/1/14   ___________________________     ________   _______

                 __________________________   ________     _______

             ____________________________   ________    _________

12/31/14 __________________________ _________ __________

              ___________________________ _________ __________

2/1/15     __________________________ __________ _________

               __________________________   _________   _________

(To record interest)

              _________________________   __________ _________  

            __________________________   _________   ____________

(to pay note)

Explanation / Answer

In the books of Takemoto Corporation

Date Account Title Debit Credit 11/1/14 Cash 60,000 Short term note payable 60,000 12/31/14 Interest expense 900 Interest payable 900 2/1/15 Interest expense 450 Interest payable 900 Cash 1,350 2/1/15 Short term note payable 60,000 Cash 60,000

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