Final answer:
The student's question involves creating journal entries for transactions concerning notes payable for C.S. Blossom Company, including borrowing from banks and preparing adjusting entries for those loans.
Step-by-step explanation:
The student is asking for assistance with preparing journal entries for different transactions involving notes payable for C.S. Blossom Company. The first transaction is for borrowing $68,000 from First National Bank on a 9-month, 8% note on July 1, 2022. The second transaction is borrowing $71,000 from Lyon County State Bank on a 3-month, 6% note on November 1, 2022. Adjusting entries need to be prepared on December 31, 2022. The company must repay the principal and interest to Lyon County State Bank on February 1, 2023, and to First National Bank on April 1, 2023.
Journal Entries:
July 1, 2022: Debit Cash $68,000; Credit Notes Payable $68,000. (To record the borrowing of funds.)
November 1, 2022: Debit Cash $71,000; Credit Notes Payable $71,000. (To record the borrowing of funds.)
December 31, 2022 (Adjusting Entry):Debit Interest Expense; Credit Interest Payable. (Interest amount is calculated based on the notes and their respective interest rates for the time period they are outstanding until December 31, 2022.)
February 1, 2023: Debit Notes Payable $71,000; Debit Interest Expense; Credit Cash. (The interest is calculated for the time period the note was outstanding.)
April 1, 2023: Debit Notes Payable $68,000; Debit Interest Expense; Credit Cash. (Interest is calculated for the entire 9-month period.)