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18 April, 13:28

C. S. Cullumber Company had the following transactions involving notes payable. July 1, 2022 Borrows $74,000 from First National Bank by signing a 9-month, 8% note. Nov. 1, 2022 Borrows $77,000 from Lyon County State Bank by signing a 3-month, 6% note. Dec. 31, 2022 Prepares adjusting entries. Feb. 1, 2023 Pays principal and interest to Lyon County State Bank. Apr. 1, 2023 Pays principal and interest to First National Bank.

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  1. 18 April, 14:48
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    The following journal entries will be passed in the books of accounts:

    Explanation:

    date account and explanation Debit Credit

    July 1 Cash 74000

    Notes payable-First national bank 74000

    Nov 1 Cash 77000

    Notes payable-Lyon country state bank 77000

    Dec 31 Interest expense 2960

    Interest payable 2960

    (to record accrued interest)

    Interest expense 770

    Interest payable 770

    (To record accrued interest)

    Feb 1 Notes payable-Lyon country state bank 77000

    Interest payable 770

    Interest expense 385

    Cash 78155

    (To record amount paid)

    Apr 1 Notes payable-First national bank 74000

    Interest payable 2960

    Interest expense 1480

    Cash 78440

    (To record amount paid)
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