Question

On November 7, Mura Company borrows $360,000 cash by signing a 90-day 9% 5360.000 note payable 1 Compute the accrued interest payable on December 31 2. & 3. Prepare the journal entry to record the accrued interest expense at December 31 and payment of the note at maturity on February 5. Complete this question by entering your answers in the tabs below Reg 1 Reg 2 and 3 Compute the accrued interest payable on December 31. 100 days a year. Do not round your intermediate codations Principal X Rate (%) X Time = interest Total through matunty %Year and interest acces %Interest recognized February 5 %

Answer 1

November 7, 202x, cash loan obtained at 9%

Dr Cash 360,000

Cr Notes payable 360,000

December 31, 202x, accrued interest

Dr Interest expense 4,770

Cr Interest payable 4,770

I's using a 360 day year for calculating interest payable. When you use a 360 day year, all months have only 30 days (including December). Interest expense = $360,000 x 9% x 53/360 days = $4,770

February 5, 202y, cash loan repaid

Dr Notes payable 360,000

Dr Interest expense 3,330

Dr Interest payable 4,770

Cr Cash 368,100

Interest expense = $360,000 x 9% x 37/360 days = $3,330