Exercise 10-1 Kelly Jones and Tami Crawford borrowed $17,143 on a 7-month, 796 n

Question

Exercise 10-1 Kelly Jones and Tami Crawford borrowed $17,143 on a 7-month, 796 note from Gem State Bank to open their business, JC's Coffee House. The money was borrowed on June 1, 2017, and the note matures January 1, 2018. Prepare the entry to record the receipt of the funds from the loan. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit June 1 Prepare the entry to accrue the interest 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

Explanation / Answer

Jun-01 Cash 17143      Notes payable 17143 Jun-30 Interest expense 100 =17143*7%/12        Interest payable 100 Balancein interest payable account = 100*7 = 700 Jan-01 Notes payable 17143 Interest payable 700        Cash 17843

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