Taylor Bank lends Guarantee Company $117,933 on January 1. Guarantee Company signs a $117,933, 9%, nine-month note. The entry made by Guarantee Company on January 1 to record the proceeds and issuance of the note is

Question

Business

Moises Andrews

6 May, 03:36

Taylor Bank lends Guarantee Company $117,933 on January 1. Guarantee Company signs a $117,933, 9%, nine-month note. The entry made by Guarantee Company on January 1 to record the proceeds and issuance of the note is

+2

Answers (1)

Know the Answer?

Zion Hendricks · Answer 1

January 1, 202x, bank loan obtained from Taylor Bank (9 months, 9% interest rate)

Dr Cash 117,933

Cr Notes payable 117,933

Explanation:

Since this is an interest bearing note that will be paid in less than a year, we should record it at face value. All current liabilities must be recorded at face value.