Answer and Explanation:
Marsh Inc.
Journal Entries
Debit Credit
(a) Cash ($680,000 - $68,000) $612,000
Interest expense ($680,000 x 10%) $68,000
Notes payable $680,000
<em>To record cash received against loan.</em>
(b) Cash $490,000
Accounts receivable $490,000
<em> To record cash collected during first month.</em>
(c) Notes payable $490,000
Interest expense ($680,000 x 10% x 1/12) $5,667
Cash ($490,000 + $5,667) $495,667
<em>To record notes payable and first month interest expense.</em>