On August 1, 2021, Trico Technologies, an aeronautic electronics company, borrows $20.8 million cash to expand operations. The loan is made by FirstBanc Corp. under a short-term line of credit arrangement. Trico signs a six-month, 6% promissory note. Interest is payable at maturity. FirstBanc Corp.'s year-end is December 31. Required: 1.-3. Record the necessary entries in the Journal Entry Worksheet below for FirstBanc Corp. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions (i. e. 5 should be entered as 5,000,000).)

Question

Addison Snow

Business

22 January, 08:47

On August 1, 2021, Trico Technologies, an aeronautic electronics company, borrows $20.8 million cash to expand operations. The loan is made by FirstBanc Corp. under a short-term line of credit arrangement. Trico signs a six-month, 6% promissory note. Interest is payable at maturity. FirstBanc Corp.'s year-end is December 31. Required: 1.-3. Record the necessary entries in the Journal Entry Worksheet below for FirstBanc Corp. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions (i. e. 5 should be entered as 5,000,000).)

+2

Answers (1)

Know the Answer?

Keely Palmer · Answer 1

Record the necessary entries in the Journal Entry Worksheet below for FirstBanc Corp.

August 01, 2021:

Cash - 20.800.000

Notes Payable - 20.800.000

December 31, 2021:

Interest Expense - 520.000

Interest Payable - 520.000

January 31, 2022:

Notes Payable - 20.800.000

Interest Payable - 520.000

Interest Expense - 104.000

Cash - 21.424.000

Explanation:

August 01, 2021:

Cash - 20.800.000

Notes Payable - 20.800.000

December 31, 2021:

Interest Expense - 520.000

Interest Payable - 520.000

January 31, 2022:

Notes Payable - 20.800.000

Interest Payable - 520.000

Interest Expense - 104.000

Cash - 21.424.000