Question

1-On July 1, 2013, Avery Services issued a long-term note payable for $10,000. It is payable over a 5-year term in $2,000 installments on July 1 of each succeeding year. Journalize required transactions on July, 1 2013. Journalize required transactions on Dec 31 2013 Journalize required transactions on July 1 2014. Show calculations

2-A $20,000, 3-month, 8% note payable was issued on November 1, 2015. The amount of interest expense recorded in the year 2016 is $

Answer 1

Date	Account Titles and Explanation	Debit	Credit
31-Dec-13	Interest Expense ($10,000 x 4% x 6/12)	$     200.00
	Interest Payable		$     200.00
1-Jul-14	Interest Expense (10000 x 4%) - 200	$     200.00
	Notes Payable	$  2,000.00
	Interest Payable	$     200.00
	Cash		$  2,400.00
2-A $20,000, 3-month, 8% note payable was issued on November 1, 2015. The amount of interest expense recorded in the year 2016 is $
Interest expenses = $20,000 x 8%/12 x 1 month	$                                                                 133.33