Entries for Notes Payable A business issued a 90day 15 note

Entries for Notes Payable A business issued a 90-day, 15% note for $83,000 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.

Solution

General Journal Debit Credit a. Accounts Payable $83,000 Notes Payable $83,000 b. Notes Payable $83,000 Interest Expense($83,000 * 15% * 90/360) $3,112.5 Cash $86,112.5