Question
In: Accounting
Windsor, Inc. had the following transactions involving notes payable. July 1, 2020 Borrows $53,500 from First...
Windsor, Inc. had the following transactions involving notes
payable.
| July 1, 2020 | Borrows $53,500 from First National Bank by signing a 9-month, 8% note. | |
| Nov. 1, 2020 | Borrows $64,200 from Lyon County State Bank by signing a 3-month, 6% note. | |
| Dec. 31, 2020 | Prepares adjusting entries. | |
| Feb. 1, 2021 | Pays principal and interest to Lyon County State Bank. | |
| Apr. 1, 2021 | Pays principal and interest to First National Bank. |
Prepare journal entries for each of the transactions.
(Credit account titles are automatically indented when
amount is entered. Do not indent manually. Record journal entries
in the order presented in the problem.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|
|
July 1, 2020November 1, 2020December 31, 2020February 1, 2021April 1, 2021 |
||||
|
July 1, 2020November 1, 2020December 31, 2020February 1, 2021April 1, 2021 |
||||
|
July 1, 2020November 1, 2020December 31, 2020February 1, 2021April 1, 2021 |
||||
|
(To record adjusting entry for First National Bank note) |
||||
|
July 1, 2020November 1, 2020December 31, 2020February 1, 2021April 1, 2021 |
||||
|
(To record adjusting entry for Lyon County State Bank note) |
||||
|
||||
|
||||
Solutions
Expert Solution
Prepare journal entries for each of the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|
|
July 1, 2020 |
Cash | 53500 | ||
| 8% Notes payable | 53500 | |||
|
November 1, 2020 |
Cash | 64200 | ||
| 6% Notes payable | 64200 | |||
|
December 31, 2020 |
Interest expense | 2140 | ||
| Interest payable | 2140 | |||
|
(To record adjusting entry for First National Bank note) |
||||
|
December 31 |
Interest expense (64200*6%*2/12) | 642 | ||
| Interest payable | 642 | |||
|
(To record adjusting entry for Lyon County State Bank note) |
||||
|
6% Notes payable | 64200 | ||
| Interest payable | 642 | |||
| Interest expense | 321 | |||
| Cash | 65163 | |||
|
8% Notes payable | 53500 | ||
| Interest payable | 2140 | |||
| Interest expense | 1070 | |||
| Cash | 56710 |
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