Question

PLEASE USE CHARTS I PROVIDED

A business issued a 60-day note for $84,000 to a bank. The note was discounted at 9%.

a. Journalize the entries to record the issuance of the note on March 1. Refer to the Chart of Accounts for exact wording of account titles. Round your answers to nearest whole dollar.

PAGE 1

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3

b. Journalize the entries to record the payment of the note at maturity. Assume a 360-day year. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 2

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2

Answer 1

(a)

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1		Accounts Payable		82,740			(82,740)
2		Interest expense (84,000*9%*60/360)		1,260
3		Notes payable			84,000		84,000

(b)

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1		Notes payable		84,000			(84,000)
2		Cash			84,000	(84,000)

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