Question

On September 1, 2021, Allied Moving Corp. borrows $80,000 cash from First National Bank. Allied signs a six-month, 7% note payable. Interest is payable at maturity. Allied's year-end is December 31.1., 2. & 3. Record the following transactions for the note payable by Allied Moving Corp. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations. Round your answers to nearest dollar amount.)

Answer 1

Required journal entries

Date	Accounts title	Debit	Credit
01-Sep-21	Cash	$80,000
	Notes Payable		$80,000
	(to record borrowing)
31-Dec-21	Interest Expense ($80000 x 7% x 4/12)	$1,867
	Interest Payable		$1,867
	(to record interest accrued for 4 months -Sept, Oct, Nov and Dec)
01-Mar-22	Notes Payable	$80,000
	Interest Payable	$1,867
	Interest Expense ($80000 x 7% x 2/12)	$933
	Cash		$82,800
	(to record repayment)