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At December 31, 2011, Portland Corporation had two notes payable outstanding (notes 1 and 2). At December 31, 2012, Portland also had two notes payable outstanding (notes 3 and 4). These notes are described below.

	Date of note	Principal Amount	Interest Rate	Number of Days
December 31, 2011
Note 1	November 25, 2011	$28,000	8%	90
Note 2	December 16, 2011	17,800	9%	60
December 31, 2012
Note 3	December 11, 2012	16,400	9%	120
Note 4	December 07, 2012	19,000	10%	90

Required a. Prepare the adjusting entries for interest at December 31, 2011. b. Assume that the adjusting entries were made at December 31, 2011, and that no adjusting entries were made during 2012. Prepare the 2012 journal entries to record payment of the notes that were outstanding at December 31, 2011. c. Prepare the adjusting entries for interest at December 31, 2012. Round answers to nearest dollar. Use 360 days for interest calculations when applicable.

General Journal
Date	Description	Debit	Credit
a.
Dec.31	AnswerNotes PayableInterest PayableInterest ExpenseCash	$Answer	$Answer
	AnswerNotes PayableInterest PayableInterest ExpenseCash	Answer	Answer
	To record interest on note 1.
Dec.31	AnswerNotes PayableInterest PayableInterest ExpenseCash	Answer	Answer
	AnswerNotes PayableInterest PayableInterest ExpenseCash	Answer	Answer
	To accrue interest on note 2.
b.
Feb.14	Notes Payable	Answer	Answer
	AnswerNotes PayableInterest PayableInterest ExpenseCash	Answer	Answer
	Interest Expense	Answer	Answer
	AnswerNotes PayableInterest PayableInterest ExpenseCash	Answer	Answer
	To record payment of Note 2.
Feb.23	Notes Payable	Answer	Answer
	AnswerNotes PayableInterest PayableInterest ExpenseCash	Answer	Answer
	Interest Expense	Answer	Answer
	AnswerNotes PayableInterest PayableInterest ExpenseCash	Answer	Answer
	To record payment of Note 1.
c.
Dec.31	AnswerNotes PayableInterest PayableInterest ExpenseCash	Answer	Answer
	AnswerNotes PayableInterest PayableInterest ExpenseCash	Answer	Answer
	To record interest on Note 3.
Dec.31	AnswerNotes PayableInterest PayableInterest ExpenseCash	Answer	Answer
	AnswerNotes PayableInterest PayableInterest ExpenseCash	Answer	Answer
	To record interest on Note 4.

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