Sweet Company borrowed $34,800 on November 1, 2020, by signing a $34,800, 9%, 3-month note. Prepare Sweet's November 1, 2020, entry; the December 31, 2020, annual adjusting entry; and the February 1, 2021, entry

The journal entries are shown below:

On November 1

Cash A/c Dr $34,800

To Notes payable A/c $34,800

(Being issuance of the note payable is recorded)

On December 31

Interest expense A/c Dr $522

To Interest payable A/c $522

(Being accrued interest adjusted)

The computation is shown below:

Principal * rate of interest * number of months : (total number of months in a year)

= $34,800 * 9% * (2 months : 12 months)

= $522

The two month is calculated from the November 1 to December 31

On February 1

Interest Expense A/c Dr $261

Interest payable A/c Dr $522

Note Payable A/c Dr $34,800

To Cash A/c $35583

(Being payment is recorded)

The computation is shown below:

Principal * rate of interest * number of months : (total number of months in a year)

= $34,800 * 9% * (1 months : 12 months)

= $261

The one month is calculated from the January 1 to February 1