Question

Prepare the journal entry that National Bank would record, assuming it makes adjusting entries monthly, for the payment of the bank loan to Fischer Company on August 1. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Date Account Titles and Explanation Debit Credit August 1 Bank Loan Payable 54000 Cash 54 Prepare journal entries that National Bank would record for: (1) the receipt of interest on September 1, (2) the accrual of interest income on September 30, (3) the receipt of interest on October 1, and (4) the receipt of interest on November 1. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.)

Answer 1

The journal entry for the payment of the bank loan is: Debit Bank Loan Payable $54,000 and Credit Cash $54,000. The journal entries for the receipt of interest and accrual of interest income would depend on specific details.

Step-by-step explanation:

The journal entry that National Bank would record for the payment of the bank loan to Fischer Company on August 1 is:

• Debit: Bank Loan Payable $54,000
• Credit: Cash $54,000

Journal entries for the receipt of interest on September 1, the accrual of interest income on September 30, the receipt of interest on October 1, and the receipt of interest on November 1 would depend on the specific amounts and terms of the interest. However, generally, the journal entries would involve crediting Cash and debiting Interest Income or a similar income account.