12 On November 1 2012 Bobs Skateboards Store signed a 12000

12. On November 1, 2012, Bob\'s Skateboards Store signed a $12,000, 3-month, 5% note payable to cover a past due account payable. This company uses a calendar ycar to report financial activity and updates the accounting records monthly. a. Prepare Bob\'s general journal entry to record the issuance of the note payable b. Prepare Bob\'s general journal entry to record the accrued interest due at December 31, 2012. c. Prepare Bob\'s general journal entry to record the payment of the note on February 1, 2013. Date Account Description Debit Credit

Solution

Date Account Description Debit Credit Nov. 1 Accounts Payable $12,000 Notes Payable $12,000 Dec. 31 Interest Expense[$12,000 × 5% × (60 ÷ 360)] $100 Interest Payable $100 Feb. 1 Interest Expense[($12,000 × 5% × (30 ÷ 360)] $50 Interest Payable $100 Notes Payable $12,000 Cash $12,150