Many businesses borrow money during periods of increased business activity to finance inventory and accounts receivable. For example, Mitt Corporation builds up its inventory to meet the needs of retailers selling to Christmas shoppers. A large portion of Mitt Corporation sales are on credit. As a result, Mitt Corporation often collects cash from its sales several months after Christmas. Assume on November 1, 2021, Mitt Corporation borrowed $6.2 million cash from Metropolitan Bank and signed a promissory note that matures in six months. The interest rate was 9.00 percent payable at maturity. The accounting period ends December 31. Required: 1, 2 & 3. Prepare the required journal entries to record the note on November 1, 2021, the adjusting entry required on December 31 2021 (if any), and interest on the maturity date, April 30, 2022, assuming that interest has not been recorded since December 31, 2021. (Enter your answers in whole dollars. If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet < 1 2 Record the borrowing of $6,200,000. 3 Note: Enter debits before credits. Date Nov 01, 2021 Record entry Clear entry General Journal Debit > Credit View general journal
Many businesses borrow money during periods of increased business activity to finance inventory and accounts receivable. For example, Mitt Corporation builds up its inventory to meet the needs of retailers selling to Christmas shoppers. A large portion of Mitt Corporation sales are on credit. As a result, Mitt Corporation often collects cash from its sales several months after Christmas. Assume on November 1, 2021, Mitt Corporation borrowed $6.2 million cash from Metropolitan Bank and signed a promissory note that matures in six months. The interest rate was 9.00 percent payable at maturity. The accounting period ends December 31. Required: 1, 2 & 3. Prepare the required journal entries to record the note on November 1, 2021, the adjusting entry required on December 31 2021 (if any), and interest on the maturity date, April 30, 2022, assuming that interest has not been recorded since December 31, 2021. (Enter your answers in whole dollars. If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet < 1 2 Record the borrowing of $6,200,000. 3 Note: Enter debits before credits. Date Nov 01, 2021 Record entry Clear entry General Journal Debit > Credit View general journal
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Many businesses borrow money during periods of increased business activity to finance inventory and accounts receivable. For example, Mitt Corporation builds up its inventory to meet the needs of retailers selling to Christmas shoppers. A large portion of Mitt Corporation sales are on credit. As a result, Mitt Corporation often collects cash from its sales several months after Christmas. Assume on November 1, 2021, Mitt Corporation borrowed $6.2 million cash from Metropolitan Bank and signed a promissory note that matures in six months. The interest rate was 9.00 percent payable at maturity. The accounting period ends December 31.
**Required:**
1, 2 & 3. Prepare the required journal entries to record the note on November 1, 2021, the adjusting entry required on December 31, 2021 (if any), and interest on the maturity date, April 30, 2022, assuming that interest has not been recorded since December 31, 2021. *(Enter your answers in whole dollars. If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)*
**Journal Entry Worksheet:**
- **Record the borrowing of $6,200,000.**
**Note:** Enter debits before credits.
- Date: Nov 01, 2021
- A table is provided to fill out with columns for "Date," "General Journal," "Debit," and "Credit."
**Interface Options:**
- "Record entry" button.
- "Clear entry" button.
- "View general journal" button.
This is a practice activity for creating journal entries in accounting, demonstrating the recording of transactions such as loans and interest.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education