Answer and Explanation:
The Journal entry is shown below:-
1. Cash Dr, $50,500
To Notes payable $50,500
(Being amount borrowed is recorded)
2. Cash Dr, $60,600
To Notes payable $60,600
(Being amount borrowed is recorded)
3. Interest expenses Dr, $2,020
($50,500 × 8%) × 6 ÷ 12
To Interest payable $2,020
(Being Interest expense payable is recorded)
4. Interest expenses Dr, $607
($60,600 × 6%) × 2 ÷ 12
To Interest payable $607
(Being accrued expenses is recorded)
5. Notes Payable Dr, $60,600
Interest Expenses Dr, $302
(($60,600 × 6%) × 1 ÷ 12
Interest payable Dr, $607
To Cash $61,509
(Being payment of principal and interest is recorded)
6. Notes Payable Dr, $50,500
Interest Expenses Dr, $1,010
(($50,500 × 8%) × 3 ÷ 12
Interest payable Dr, $2,020
To Cash $53,530
(Being payment of principal and interest is recorded)
