Question

Sub-Cinema Inc. borrowed $10,000 on Jan. 1 and will repay the loan with 12 equal payments made at the end of the month for 12 months. The interest rate is 12% annually. If the monthly payments are $888.49, what is the journal entry to record the cash received on Jan. 1 and the first payment made on Jan. 31?

Answer 1

Jornnal Entry
Date	Particular	Debit $	Credit $
1. jan.	Cash A/c	10,000
	To notes payables		10,000
	(Being amount Borrowed Through note payable)
31. jan	Interest Expense	100
	Note Payables	788.49
	To Cash		888.49
	(Being interst paid)