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Homework answers / question archive / Exercise 9-4 Interest-bearing notes payable with year-end adjustments LO P1 Keesha Co
Exercise 9-4 Interest-bearing notes payable with year-end adjustments LO P1
Keesha Co. borrows $165,000 cash on December 1 of the current year by signing a 90-day, 7%, $165,000 note.
1. On what date does this note mature? 2. & 3. What is the amount of interest expense in the current year and the following year from this note? 4. Prepare journal entries to record (a) issuance of the note, (b) accrual of interest on December 31, and (c) payment of the note at maturity.
Answer is complete but not entirely correct.
Complete this question by entering your answers in the tabs below.
Req 1
Req 2 and 3
Req 4
What is the amount of interest expense in the current year and the following year from this note? (Use 360 days a year.
Interest = Principal*Rate*Time
| Total Through | Interest Expenses | Interest Expenses | |
| Maturity | Current Year | Following Year | |
| Principal | $165,000 | $165,000 | $165,000 |
| Rate (%) | 7% | 7% | 7% |
| Time | 90/360 | 30/360 | 60/360 |
| Total Interest | $2,888 | $963 | $1,925 |
