Answer:
November 1, 2016
Dr Cash 120,000
Cr Notes Payable 120,000
December 31, 2016
Dr Interest Expense 2,000
Cr Interest Payable 2,000
February 1, 2017
Dr Notes Payable 120,000
Dr Interest Payable 2,000
Dr Interest Expense 1,000
Cr Cash 123,000
Explanation:
Dunlin Development Company Journal entries
November 1, 2016
Dr Cash 120,000
Cr Notes Payable 120,000
December 31, 2016
Dr Interest Expense 2,000
($120,000 ×10% ×2/12)
Cr Interest Payable 2,000
February 1, 2017
Dr Notes Payable 120,000
Dr Interest Payable 2,000
Dr Interest Expense 1,000
(120,000×10%×1/12)
Cr Cash 123,000
