North Face is one of the world's most popular outdoor apparel companies. Assume that North Face borrows $2 million from U.S. Bank and signs a note promising to pay back the $2 million in nine months, at which time North Face also will pay any accrued interest. The interest rate on the note is 8 percent. Required: Prepare the journal entry North Face will record when it signs the note and receives the cash. ( Record the nine-month note with an interest rate of 8%. Prepare the journal entry that North Face will record when it pays off the note and any accrued interest after nine months. ( Record the payment of the note along with the accrued interest.
North Face is one of the world's most popular outdoor apparel companies. Assume that North Face borrows $2 million from U.S. Bank and signs a note promising to pay back the $2 million in nine months, at which time North Face also will pay any accrued interest. The interest rate on the note is 8 percent. Required: Prepare the journal entry North Face will record when it signs the note and receives the cash. ( Record the nine-month note with an interest rate of 8%. Prepare the journal entry that North Face will record when it pays off the note and any accrued interest after nine months. ( Record the payment of the note along with the accrued interest.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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North Face is one of the world's most popular outdoor apparel companies. Assume that North Face borrows $2 million from U.S. Bank and signs a note promising to pay back the $2 million in nine months, at which time North Face also will pay any accrued interest. The interest rate on the note is 8 percent.
Required:
- Prepare the
journal entry North Face will record when it signs the note and receives the cash. (- Record the nine-month note with an interest rate of 8%.
- Prepare the journal entry that North Face will record when it pays off the note and any accrued interest after nine months. (
- Record the payment of the note along with the accrued interest.
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