contestada

Coldwell, Inc. issued a $100,000, 4-year, 10% note at face value to Flint Hills Bank on January 1, 2020, and received $100,000 cash. The note requires annual interest payments each December 31. Prepare Coldwell's journal entries to record (a) the issuance of the note and (b) the December 31 interest payment.

Respuesta :

abiolataiwo2015

Answer:

a) Dr Cash 100,000

Cr Notes Payable 100,000

(b) Dr Interest Expense 10,000

Cr Cash 10,000

Explanation:

Preparation of Coldwell's journal entries

a) Dr Cash 100,000

Cr Notes Payable 100,000

(Being to record the issuance of the note)

(b) Dr Interest Expense 10,000

Cr Cash 10,000

(10%*100,000)

(Being to record the December 31 interest payment)