Question

Chapter 9: Accounting for Current Liabilities Notes Payable Assume Tribbiani Airlines borrows $1,000,000 from Buffay Bank on November 1, 2018 signing an 10%, six-month note payable. For Tribbiani: 15. Record the issuance of the note. 16. Record the appropriate adjusting entry for the note on December 31, 2018. 17. Record the payment of the note at maturity. Classified Balance Sheet On December 1, 2017, JHF Corporation borrows $400,000, of which 895,000 is due in 2018. 18. Show how JHF should record the debt on its December 31, 2017 classified balance sheet.

Answer 1

Answer to Question No. 15 to 17: Credit Date Nov 1, 2018 Debit 1,000,000 1,000,000 16,667 Dec 31, 2018 16,667 Account Titles and Explanation Cash Notes Payable (To record issuance of note against borrowing) Interest Expense ($1,000,000 * 10%* 2/12) Interest Payable (To record interest accrued) Notes Payable Interest Payable Interest Expense ($1,000,000 * 10% * 4/12) Cash (To record payment of note at maturity) Apr 30, 2019 1,000,000 16,667 33,333 1,050,000