219k views
4 votes
On November 1, 2018, Aviation Training Corp. borrows $46,000 cash from Community Savings and Loan. Aviation Training signs a three-month, 6% note payable. Interest is payable at maturity. Aviation’s year-end is December 31.Required: Record the necessary entries in the Journal Entry.i. Record the issuance of note.ii. Record the adjustment for interest.iii. Record the repayment of the note at maturity.

User Matthijs P
by
8.1k points

1 Answer

6 votes

Answer and Explanation:

The journal entries are shown below:

1. Cash $46,000

To Note payable $46,000

(Being the issuance of the note is recorded)

2. Interest expense ($46,000 × 6% × 2 months ÷ 12 months) $460

To interest payable $460

(Being the interest expense is recorded)

3. Note payable $46,000

Interest payable $460

Interest expense ($46,000 × 6% × 1 months ÷ 12 months ) $230

To cash $46,690

(Being the repayment of the note is recorded)

User Mike Heinz
by
9.1k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.