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14 February, 00:13

On August 1, 2018, Trico Technologies, an aeronautic electronics company, borrows $21 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, 9% promissory note. Interest is payable at maturity. FirstBanc

Corp.'s year-end is December 31.

a. Record the acceptance of the note by FirstBanc Corp.

b. Record the appropriate adjustment for the note by FirstBanc Corp. on December 31, 2018.

c. Record the receipt of cash by FirstBanc Corp. at maturity.

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  1. 14 February, 00:25
    0
    Answer: First Bank Corp journal $

    August 1 2018

    1. Trico Dr 21m

    Creditor Cr. 21m

    Narration. Issuance 21m, 9%, 6 months promissory note to Trico

    Dec 31 2018

    2. Trico Dr. 1,890,000

    Interest income Cr. 1,890,00

    Narration Interest payable on promissory note to Trico

    December 31 2018

    3 Bank Dr22,890,000

    Trico. Cr. 22,890,000

    Narration. payment of promissory notes and interest due on maturity.
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