Nicole thinks that her business, Nicole’s Getaway Spa (NGS), is doing really well and she isplanning a large expansion. With such a large expansion, Nicole will need to finance some ofit using debt. She signed a one-year note payable with the bank for $50,000 with a 6 percentinterest rate. The note was issued October 1, 2014; interest is payable semiannually; and the end ofNicole’s accounting period is December 31.Required:Prepare the journal entries required from the issuance of the note until its maturity on September30, 2015, assuming that no entries are made other than at the end of the accounting period, wheninterest is payable, and when the note reaches its maturity.
Nicole thinks that her business, Nicole’s Getaway Spa (NGS), is doing really well and she is
planning a large expansion. With such a large expansion, Nicole will need to finance some of
it using debt. She signed a one-year note payable with the bank for $50,000 with a 6 percent
interest rate. The note was issued October 1, 2014; interest is payable semiannually; and the end of
Nicole’s accounting period is December 31.
Required:
Prepare the
30, 2015, assuming that no entries are made other than at the end of the accounting period, when
interest is payable, and when the note reaches its maturity.
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