Many businesses borrow money during periods of increased business activity to finance inventory and accounts receivable. Hudson's Bay Company (HBC) is Canada's largest department store. Each Christmas, HBC builds up its inventory to meet the needs of Christmas shoppers. A large portion of Christmas sales are on credit. As a result, HBC often collects cash from the sales several months after Christmas. Assume that on November 1, 2020, HBC borrowed $6.7 million cash from Downtown Bank and signed a promissory note that matures in six months. The interest rate was 5.7 percent payable at maturity. The accounting period ends December 31. Required: 1. Prepare the journal entry to record the note on November 1, 2020. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) 2. Prepare any adjusting entry required on December 31, 2020. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) View transaction list Journal entry worksheet View transaction list Journal entry worksheet 1 Record the journal entry to record the note on November 1, 2020. Note: Enter debits before credits. Date November 01, 2020 1 Record the adjusting entry required on December 31, 2020. Note: Enter debits before credits. General Journal Debit Credit Date December 31, 2020 General Journal Debit Credit Record entry Clear entry View general journ Record entry Clear entry View general journ 3. Prepare the journal entry to record payment of the note and interest on the maturity date, April 30, 2021, assuming that interest has not been recorded since December 31, 2020. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)
Many businesses borrow money during periods of increased business activity to finance inventory and accounts receivable. Hudson's Bay Company (HBC) is Canada's largest department store. Each Christmas, HBC builds up its inventory to meet the needs of Christmas shoppers. A large portion of Christmas sales are on credit. As a result, HBC often collects cash from the sales several months after Christmas. Assume that on November 1, 2020, HBC borrowed $6.7 million cash from Downtown Bank and signed a promissory note that matures in six months. The interest rate was 5.7 percent payable at maturity. The accounting period ends December 31. Required: 1. Prepare the journal entry to record the note on November 1, 2020. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) 2. Prepare any adjusting entry required on December 31, 2020. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) View transaction list Journal entry worksheet View transaction list Journal entry worksheet 1 Record the journal entry to record the note on November 1, 2020. Note: Enter debits before credits. Date November 01, 2020 1 Record the adjusting entry required on December 31, 2020. Note: Enter debits before credits. General Journal Debit Credit Date December 31, 2020 General Journal Debit Credit Record entry Clear entry View general journ Record entry Clear entry View general journ 3. Prepare the journal entry to record payment of the note and interest on the maturity date, April 30, 2021, assuming that interest has not been recorded since December 31, 2020. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Many businesses borrow money during periods of increased business activity to
finance inventory and accounts receivable. Hudson's Bay Company (HBC) is Canada's
largest department store. Each Christmas, HBC builds up its inventory to meet the
needs of Christmas shoppers. A large portion of Christmas sales are on credit. As a
result, HBC often collects cash from the sales several months after Christmas. Assume
that on November 1, 2020, HBC borrowed $6.7 million cash from Downtown Bank and
signed a promissory note that matures in six months. The interest rate was 5.7 percent
payable at maturity. The accounting period ends December 31.
Required:
1. Prepare the journal entry to record the note on November 1, 2020. (If no entry is
required for a transaction/event, select "No journal entry required" in the first
account field. Enter your answers in whole dollars.)
2. Prepare any adjusting entry required on December 31, 2020. (If no entry is required
for a transaction/event, select "No journal entry required" in the first account field.
Enter your answers in whole dollars.)
View transaction list
Journal entry worksheet
View transaction list
Journal entry worksheet
>
Record the journal entry to record the note on November 1, 2020.
Note: Enter debits before credits.
November 01,
2020
<
1
Record the adjusting entry required on December 31, 2020.
Note: Enter debits before credits.
General Journal
Debit
Credit
Date
December 31,
2020
General Journal
Debit
Credit
Record entry
Clear entry
View general journ
Record entry
Clear entry
View general journ
3. Prepare the journal entry to record payment of the note and interest on the maturity
date, April 30, 2021, assuming that interest has not been recorded since December 31,
2020. (If no entry is required for a transaction/event, select "No journal entry
required" in the first account field. Enter your answers in whole dollars.)
View transaction list
Journal entry worksheet
1
Record the payment of the note and interest on the maturity date, April 30,
2021, assuming that interest has not been recorded since December 31, 2020.
Note: Enter debits before credits.
Date
April 30, 2021
General Journal
Debit
Credit
Record entry
Clear entry
View general journa
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