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In: Accounting

On June 1, Oriole Company Ltd. borrows $42,000 from Acme Bank on a 6-month, $42,000, 8%...

On June 1, Oriole Company Ltd. borrows $42,000 from Acme Bank on a 6-month, $42,000, 8% note. The note matures on December 1.

Prepare the entry on June 1. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date

Account Titles and Explanation

Debit

Credit
June 1

eTextbook and Media

List of Accounts

  

  

Prepare the adjusting entry on June 30. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date

Account Titles and Explanation

Debit

Credit
June 30

eTextbook and Media

List of Accounts

  

  

Prepare the entry at maturity (December 1), assuming monthly adjusting entries have been made through November 30. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date

Account Titles and Explanation

Debit

Credit
Dec. 1

eTextbook and Media

List of Accounts

  

  

What was the total financing cost (interest expense)?

Total interest expense $Type your answer here

Solutions

Expert Solution

repare the entry on June 1. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date

Account Titles and Explanation

Debit

Credit
June 1 Cash 42000
Notes payable 42000

  

  

Prepare the adjusting entry on June 30. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date

Account Titles and Explanation

Debit

Credit
June 30 Interest expense (42000*8%*1/12) 280
Interest payable 280

  

Prepare the entry at maturity (December 1), assuming monthly adjusting entries have been made through November 30. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date

Account Titles and Explanation

Debit

Credit
Dec. 1 Notes payable 42000
Interest payable (280*6) 1680
Cash 43680

  

  

What was the total financing cost (interest expense)?

Total interest expense $1680

ekkarill92 answered 2 years ago
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