Answer:
Explanation:
The adjusting entries are shown below:
1. Cash A/c Dr $66,000,000
To Short term notes payable A/c $66,000,000
(Being issue of short term note payable is recorded)
2. Interest expense A/c Dr $1,320,000
To Interest payable A/c $1,320,000
(Being interest is recorded)
The interest amount is computed below:
= Principal × rate of interest × number of months ÷ (total number of months in a year)
= $66,000,000 × 8% × ( 3 months ÷ 12 months)
= $1,320,000
The 3 months is calculated from October 1 to December 31
