Question

Sunland Company borrowed $50,400 on November 1, 2017, by signing a $50,400, 9%, 3-month note. Prepare Sunland’s November 1, 2017, entry; the December 31, 2017, annual adjusting entry; and the February 1, 2018, entry. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
11/1/17
12/31/17
2/1/18

Answer 1

Date	Account title & explanation	Debit	Credit
11-01-2017	Cash Account	$         50,400
	Note Payables		$         50,400
	(To record the issue of note payables)
12-31-2017	Interest expenses	$               756
	Interest Payable		$               756
	($50400*9%*2/12)
	[To record the accrued interest at December 31]
02-01-2018	Interest Expenses	$               378
	($50400*9%*1/12)
	Interest payable	$               756
	Note Payable	$         50,400
	Cash		$         51,534
	[To record the payment of note )