Question

Kelly Jones and Tami Crawford borrowed $15,000 on a 7‐month, 8% note from Gem State Bank to open their business, JC's Coffee House. The money was borrowed on June 1, 2017, and the note matures January 1, 2018. (a) Prepare the entry to record the receipt of the funds from the loan. (b) Prepare the entry to accrue the interest on June 30. (c) Assuming adjusting entries are made at the end of each month, determine the balance in the Interest Payable account at December 31, 2017. (d) Prepare the entry required on January 1, 2018, when the loan is paid back.

Answer 1

Answer:

a. DR- Cash/Bank - $15,000

   CR - Notes Payable  - $15,000

b. DR - Interest Expenses - $100 ($15000*0.08*1/12)

   CR - Interest Payable  - $100 ($15000*0.08*1/12)

c.  DR - Interest Expenses - $700 ($15000*0.08*1/12*7)

    CR - Interest Payable  - $700 ($15000*0.08*1/12*7)

d.  DR - Note Payable  - $15,000

    DR - Interest Payable  - $700

    CR - Cash/Bank -         $15,700

Explanation:

a. DR- Cash/Bank - $15,000

   CR - Notes Payable  - $15,000

b. DR - Interest Expenses - $100 ($15000*0.08*1/12)

   CR - Interest Payable  - $100 ($15000*0.08*1/12)

c.  DR - Interest Expenses - $700 ($15000*0.08*1/12*7)

    CR - Interest Payable  - $700 ($15000*0.08*1/12*7)

d.  DR - Note Payable  - $15,000

    DR - Interest Payable  - $700

    CR - Cash/Bank -         $15,700

Answer 2

Answer: Your correct answer is

a. DR- Cash/Bank - $15,000

  CR - Notes Payable  - $15,000

b. DR - Interest Expenses - $100 ($15000*0.08*1/12)

  CR - Interest Payable  - $100 ($15000*0.08*1/12)

c.  DR - Interest Expenses - $700 ($15000*0.08*1/12*7)

   CR - Interest Payable  - $700 ($15000*0.08*1/12*7)

d.  DR - Note Payable  - $15,000

   DR - Interest Payable  - $700

  CR - Cash/Bank -         $15,700

Hope this helps :) -Mark Brainiest Please :)