Question

1. On Jan 1, 2018, Bella’s Boutique negotiates $1,250,000 on a 9 month Notes Payable. Bella agreed to pay interest of 8.5% on the note.

       Required: Record the following entries (Round to the nearest whole number):

1.   1/1/2018
2. 6/30 2018 Accrues interest for six month financial statement
3. 9/30/2018

Answer 1

Date	Account title	Debit	Credit
01/01/2018	Cash	$ 1,250,000.00
	Note payable		$ 1,250,000.00
6/30/2018	Interest expenses ($1,250,000*8.5%*6/12)	$        53,125.00
	Interest payable		$        53,125.00
9/30/2018	Interest expenses ($1,250,000*8.5%*6/12)	$        26,562.50
	Interest payable	$        53,125.00
	Note payable	$ 1,250,000.00
	Cash		$ 1,329,687.50

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