Answer:
On January 1 2021, debit Cash with $48,000; credit Notes Payable with $48,000
On January 31, 2021, debit Interest Expense with $200, debit Notes Payable with $705.82; and credit Cash with $905.82.
On February 28, 2021, debit Interest Expense with $197.06, debit Notes Payable with $708.76; and credit Cash with $905.82.
Explanation:
Note: See the attached file for how the journal entries will appear in the book.
Interest paid on January 31, 2021 = $48,000 × (5% ÷ 12) = $200
Principal repaid on January 31, 2021 = $905.82 - $200 = $705.82
Interest paid on February 28, 2021 = ($48,000 - $705.82) × (5% ÷ 12) = $197.06
Principal repaid on February 28, 2021 = $905.82 - $197.06 = $708.76
