On August 1, Year 1, Company A, an aeronautic electronics company, borrows $19.7 million cash to expand operations. The loan ismade by Company B under a short-term line of credit arrangement. Company A signs a six-month, 9% promissory note. Interest ispayable at maturity. Company B's year-end is December 31.Required:1.-3. Record the necessary entries in the Journal Entry Worksheet below for Company B. (If no entry is required for a particulartransaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions (i.e. 5should be entered as 5,000,000).)X Answer is complete but not entirely correct.NoDateGeneral JournalDebitCredit1August 01Notes Receivable19,700,000Notes Payable19,700,0002December 31Interest Receivable738,750Interest Revenue738,750January 31Cash20,586,500Interest Receivable147,750 XNotes Receivable738,750 XCash19,700,000 X

The question is based on the concept of Financial Accounting.

Answered: On August 1, Year 1, Company A, an…

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 August 1, Year 1, Company A, an aeronautic electronics company, borrows $19.7 million cash to expand operations. The loan is made by Company B under a short-term line of credit arrangement. Company A signs a six-month, 9% promissory note. Interest is payable at maturity. Company B's year-end is December 31. Required: 1.-3. Record the necessary entries in the Journal Entry Worksheet below for Company B. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions (i.e. 5 should be entered as 5,000,000).) View transaction list Journal entry worksheet 1 2 3 > Record the receipt of cash at maturity. Note: Enter debits before credits. Date General Journal Debit Credit January 31
Record the Year 1 transactions in general journal form.

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