Larkspur, Inc. had the following transactions involving notes payable. July 1, 2022 Borrows $54,000 from First National Bank by signing a 9-month, 8% note. Nov. 1, 2022 Borrows $64,800 from Lyon County State Bank by signing a 3-month, 6% note. Dec. 31, 2022 Prepares annual 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. Prepare journal entries for each of the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)

Larkspur, Inc. had the following transactions involving notes payable. July 1, 2022 Borrows $54,000 from First National Bank by signing a 9-month, 8% note. Nov. 1, 2022 Borrows $64,800 from Lyon County State Bank by signing a 3-month, 6% note. Dec. 31, 2022 Prepares annual 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. Prepare journal entries for each of the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On October 1, 2020, Ayayai, Inc. assigns $1,263,100 of its accounts receivable to Pina National Bank as collateral for a $718,300 note. The bank assesses a finance charge of 3% of the receivables assigned and interest on the note of 9%.Prepare the October 1 journal entries for both Ayayai and Pina. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
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