EX 11-4 Entries for notes payable

A business issued a 45-day, 6% note for $80,000 to a creditor on account. Journalize the entries to record (a) the issuance of the note and (b) the payment of the note at maturity, including interest.

Answer:

a. Accounts Payable.......................................................... 80,000   Notes Payable...........................................................  80,000  b. Notes Payable................................................................ 80,000  Interest Expense............................................................ 600*   Cash ..........................................................................  80,600   *$80,000 × 6% × 45/360 

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