Question

A business issued a 120-day, 5% note for $60,000 to a creditor on account. Journalize the entries to record (a) the issuance of the note and (b) the payment of the note at maturity, including interest. Assume a 360-day year. If an amount box does not require an entry, leave it blank. a. b.

Answer 1

Answer:

cash                         60,000 debit

  note payable        60,000 credit

--to record issuance--

interest expense       1,000 debit

Amortizacion Land 34,000 debi

---to reocrd sale of receiptst

Explanation:

Interest payment:

principal x rate x time (being time and rate expressed in protion of a year

60,000 x 0.05 x 120/360 = 1,000