Mercedes Boats borrowed 220000 on September 15 2017 for 45 d

Mercedes Boats borrowed $220,000 on September 15, 2017, for 45 days at 7% interest by signing a note.

1. On what date will this note mature?

2. How much interest expense is created by this note? (Use 365 days a year. Do not round intermediate calculations and round the final answer to 2 decimal places.)

3. Prepare the journal entries for September 15, 2017, and the maturity date. (Use 365 days a year. Do not round intermediate calculations and round the final answers to 2 decimal places.)

1

Record the signing of a $220,000 note payable for 45 days at 7% interest.

2

Record the payment of note.

Solution

1)Maturity date :september 15,2017+ 45 days = 30october 2017

2)Interest expense :220000*.07*45/365 = $ 1898.63

3)