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Many businesses borrow money during periods of increased business activity to finance inventory and accounts...

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Accounting

Many businesses borrow money during periods of increased business activity to finance inventory and accounts receivable. For example, Mitt Corporation builds up its inventory to meet the needs of retailers selling to Christmas shoppers. A large portion of Mitt Corporation sales are on credit. As a result, Mitt Corporation often collects cash from its sales several months after Christmas. Assume on November 1, 2021, Mitt Corporation 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, 2021,

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