Question 3 Use the details in the following Promissory Note to complete the requ

Question

Question 3 Use the details in the following Promissory Note to complete the requirements below. (10 marks) Miami, Florida November 1·20- Six months AFTER THIS DATEPorter Conpany PROMISES TO PAY TO SECURITY NATIONAL BANK THE SUM OFs $10.000 WITH INTEREST AT THE RATE OF 12% PER ANNUM. SIGNED TITLE Treasure Required You are interviewing for a position as Assistant A is conducting the interview and he has asked you to prepare journal entries (transactions and accruals) related to the above note. t at Porter Company. John Caldwell Other Information Principal and interest are due at maturity of the note. Porter Co. prepares their financial statements annually. Their fiscal year end is Decem ber 31.

Explanation / Answer

Nov-01 Cash 10000      Notes payable 10000 Dec-31 Interest expense 200 =10000*12%/12*2       Interest payable 200 May-01 Interest expense 400 =10000*12%/12*4 Interest payable 200 Notes payable 10000       Cash 10600

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