Answer:
1. Nov 1, 2018
Cash 6,000,000
Notes Payable (short-term) 6,000,000
2. Dec 31, 2018
Interest Expense 80,000
Interest Payable 80,000
3. Apr 30, 2019
Notes payable (short-term) 6,000,000
Interest Payable 80,000
Interest Expense 160,000
Cash 6,240,000
Explanation:
1. $6,000,000 cash Mattel acquired from Metropolitan Bank for signing a short-term note (matures in six months).
2. 6,000,000 x .08 x 2/12 = 80,000
2 months (Nov and Dec) time that Mattel accrued $80,000 worth of interest.
3. The note was signed for 6,000,000.
Interest payable is the amount that was accrued from the last year, but hasn't been paid yet for $80,000.
Interest expense is the interest amount that is from the current year and is being repaid for $160,000.
Cash is the total (the principal payment and the interest) that Mattel is paying the bank back for borrowing for $6,240,000.