3. Required information 2.00 points 3. Prepare the journal entries on September

Question

3. Required information 2.00 points 3. Prepare the journal entries on September 30, 2019, to record payment of the notes payable at maturity. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in dollars' not in millions (i.?., $5.5 million should be entered as 5,500,000).) View transaction list Required Information [The following Information applies to the questions displayed below Journal entry worksheet Precision Castparts, a manufacturer of processed engine parts in the automotive and airline industries, borrows $40.9 million cash on October 1, 2018, to provide working capital for anticipated expansion. Precision signs a one-year, 8% promissory note to Midwest Bank under a prearranged short-term line of credit. Interest on the note is payable at maturity. Each firm has a December 31 yeer-end. Record the repayment of the note at maturity for Precision Castparts. Note: Enter debits before credits Date Debit Credit s payable Interest expense September 30, 2019 40.900.000 40,900,000 nterest payable Record entry Clear entry View general journal

Explanation / Answer

SOLUTION:

Sep-30 Notes payable 40,900,000 Interest expense (40,900,000 * 8 % * 9/12) 2,454,000 Interest payable (40,900,000 * 8 % * 3/12) 818,000 Cash 44,172,000 Cash 44,172,000 Interest revenue 2,454,000 Interest receivable 818,000 Notes receivable 40,900,000

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