Question

On January 1, 2019, Brooks Inc. borrows $90,000 from a bank and signs a 5% installment note requiring four annual payments of $25,381 at the end of each year. Complete the necessary journal entry on 12/31 by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.
No Date General Journal Debit Credit
1 12/31 Interest expense 4,500
Notes payable 90,000

Answer 1

Answer:

                                             Brooks Inc.

                                          Journal entries

DATE       General Journal                              DEBIT ($)       CREDIT ($)

12/31        Interest Expense                                4,500.00

               (90,000 x 5%)

               Notes Payable (Balancing Figure)    20,881.00  

               Cash                                                                           25,381.00