Exercise 10-2 On June 1, Sheridan Company borrows $99,000 from First Bank on a 6

Question

Exercise 10-2 On June 1, Sheridan Company borrows $99,000 from First Bank on a 6-month, $99,000, 8% note. 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 Credit June 1 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 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 indent manually.) Date Account Titles and Explanation Debit Credit Dec. 1

Explanation / Answer

Jun-01 Cash 99000      Notes payable 99000 Jun-30 Interest expense 660 =99000*8%/12        Interest payable 660 Dec-01 Notes payable 99000 Interest payable 3960        Cash 102960

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