Question

Corporation borrowed $1,950,000 on November 1, 2015. The notecarried a 9 percent interest rate with the principal and interestpayable on June 1, 2016.

(a)

The note issued on November 1.

(b)

The interest accrual on December 31.

 

Assets

=

Liabilities

+

Stockholders’ Equity

(a)

 

 

 

 

 

 

 

(b)

 

 

 

 

 

 

 

               

2.

Prepare the journal entries related for the abovetransactions:

a. Greener Pastures Corporation borrowed $1,950,000 on November1, 2015. The note carried a 9 percent interest rate with theprincipal and interest payable on June 1, 2016. Record theborrowing of $1,950,000 (for November 1st)

b. Greener Pastures Corporation borrowed $1,950,000 on November1, 2015. The note carried a 9 percent interest rate with theprincipal and interest payable on June 1, 2016. Record the interestaccrued on the notes payable. (for December 31st)