A business issued a 120-day, 5% note for $60,000 to a creditor on account. Journalize the entries to record (a) the issuance of the note and (b) the payment of the note at maturity, including interest. Assume a 360-day year. If an amount box does not require an entry, leave it blank. a. b.

Question

Camille Haley

Business

18 May, 00:13

A business issued a 120-day, 5% note for $60,000 to a creditor on account. Journalize the entries to record (a) the issuance of the note and (b) the payment of the note at maturity, including interest. Assume a 360-day year. If an amount box does not require an entry, leave it blank. a. b.

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James Spears · Answer 1

cash 60,000 debit

note payable 60,000 credit

--to record issuance--

interest expense 1,000 debit

Amortizacion Land 34,000 debi

---to reocrd sale of receiptst

Explanation:

Interest payment:

principal x rate x time (being time and rate expressed in protion of a year

60,000 x 0.05 x 120/360 = 1,000