Question

Exercise 10-1 Kelly Jones and Tami Crawford borrowed $29,143 on a 7-month, 7% 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	enter an account title to record the receipt of the funds from the loan on June 1	enter a debit amount	enter a credit amount
	enter an account title to record the receipt of the funds from the loan on June 1	enter a debit amount	enter a credit amount

SHOW LIST OF ACCOUNTS

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	enter an account title to accrue the interest on June 30	enter a debit amount	enter a credit amount
	enter an account title to accrue the interest on June 30	enter a debit amount	enter a credit amount

SHOW LIST OF ACCOUNTS

Assuming adjusting entries are made at the end of each month, determine the balance in the interest payable account at December 31, 2017.

Balance in interest payable account		$enter a dollar amount

SHOW LIST OF ACCOUNTS

Prepare the entry required on January 1, 2018, when the loan is paid back. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Jan. 1, 2018	enter an account title on January 1	enter a debit amount	enter a credit amount
	enter an account title on January 1	enter a debit amount	enter a credit amount
	enter an account title on January 1	enter a debit amount	enter a credit amount

Click if you would like to Show Work for this question:

Open Show Work

Answer 1

Date	Particulars	Debit ($)	Credit ($)
1.
01-06-17	Cash	29143
	Accounts Payable		29143
	(To record the receipts)
2.
30-06-17	Interest expense(29143 * 7% *1/12)	170
	Interest payable		170
	(To record interest payable)
3.
	Balance in interest payable account = Interest expense X Number of months = 170* 7 months = 170 *7 months = $ 1190
4.
01-01-18	Notes Payable	29,143
	Interest Payable	1190
	Cash		30,333
	(To record loan payment)

Kindly upvote