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Keesha Co. borrows $200,000 cash on November 1, 2017, by signing a 120-day, 10% note with a face value of $200,000. 1. On wha4. Prepare journal entries to record (a) issuance of the note, (b) accrual of interest at the end of 2017, and (c) payment of

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Answer #1

1) Maturity date = Nov 1+120 days = 1 March

So answer is e) March 1,2018

2) Table

Total through maturity Interest expense 2017 Interest expense 2018
Principal 200000 200000 200000
Rate 10% 10% 10%
Time 120/360 60/360 60/360
Total interest 6667 3333 3334

Journal entry

No General Journal Debit Credit
a Cash 200000
Notes payable 200000
b Interest expense 3333
Interest payable 3333
c Notes payable 200000
Interest payable 3333
Interest expense 3334
Cash 206667
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