70.2K

Verified Solution

Link Copied!

E10-2 Recording a Note Payable through Its Time to Maturity [LO 10-2] Many businesses borrow money during periods of increased business activity to finance Inventory and accounts receivable. For example, Mitt bullds up its inventory to meet the needs of retailers selling to Christmas shoppers. A large portion of Mitt's sales are on credit . As a result, Mitt often collects cash from its sales several months after Christmas. Assume on November 1, 2018, Mitt borrowed $8.1 million cash from Metropolitan Bank and signed a promissory note that matures in six months. The interest rate was 9.50 percent payable at maturity. The accounting period ends December 31 Required: 1.2 & 3. Prepare the required journal entries to record the note on November 1, 2018, the adjusting entry necessary on December 21, 2018, and the payment of interest and principal on the maturity date, April 30, 2019, assuming that interest has not been recorded since December 31, 2018. (Enter your answers in whole dollars. If no entry is required for a transaction/event, select "No Journal Entry Required in the first account field.) Journal entry worksheet Record the interest accrued on the note payable as of December 31, 2018. Note: Enter debits before credits Date General Journal Debit Credit Dec 31, 2018 Record entry Clear entry View general journal Journal entry worksheet 1 2 3 Record the repayment of the note plus interest on the maturity date. Note: Enter debits before credits. Debit General Journal Date Credit Apr 30, 2019 Record entry Clear entry View general Journal

Answer & Explanation Solved by verified expert

See Answer