Answer: Please see answers in explanation column
Explanation:
1.The Journal entries are as follows
1. To record amount borrowed
Date account title Debit Credit
Feb 1 Cash $25,000
Notes payable $25,000
2. To record prepaid insurance
Apr 1 Prepaid insurance $6,200
Cash $6,200
3. To record supplies purchased
July 17 Supplies $4,100
Account payable $4,100
4 To record money lent to customer
Nov 1 Notes receivable $9,900
Cash $9,900
2)Adjusting entry are as follows
1.To record accrued interest
Date account title Debit Credit
Dec 31 Interest expense $2,750
Interest payable $2,750
Calculation
Interest expense = principal x rate x period
$25,000 x 12% x 11/12 = $2,750
2)To record insurance expense
Date account title Debit Credit
Dec 31 Insurance expense $2,325
Prepaid insurance $2,325
Calculation
Insurance expense = amount on insurance x period
$6,200 x 9/24=$2,325
3.To record supplies expense
Dec 31 Supplies expense $2,200
Supplies $2,200
Calculation
Amount purchased - amount remaining on hand
=$4,100 -$1,900=$2,200
4. To record interest received from customer
Dec 31 Interest receivable $165
Interest revenue $165
Calculation
Interest receivable = principal x rate x period(Nov-DEC )
$9,900 x 10% x 2/12 = $165
