Question

Tamarisk, Inc. borrows $67,200 on July 1 from the bank by signing a $67,200, 8%, 1-year note payable. (a) Prepare the journal entry to record the proceeds of the note. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Answer 1

Answer:

journal entry  are given below

Explanation:

given data

borrows = $67,200

rate = 8 %

time = 1 year

to find out

Prepare the journal entry to record the proceeds of the note

solution

journal entry  are as on July 1 and December 31

date                              title                          debit                          credit

July 1                            cash                          67200  

                                   note payable                                               67200

December 31               interest expense        2688

                                     interest payable                                          2688

                                   ( interest = 6700 × 8% × $\frac{6}{12}$ )