On June 1, Chetney Company Ltd. borrows $60,000 from First Bank on a 6-month, $60,000, 8% note. The note matures on December 1. (a) Prepare the entry on June 1. (b) Prepare the adjusting entry on June 30. (c) Prepare the entry at maturity (December 1), assuming monthly adjusting entries have been made through November 30. (d) What was the total financing cost (interest expense)?

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter6: Cash And Receivables
Section: Chapter Questions
Problem 10RE: On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to...
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On June 1, Chetney Company Ltd. borrows $60,000 from First Bank on a 6-month, $60,000, 8% note. The note matures on
December 1.
(a) Prepare the entry on June 1.
(b) Prepare the adjusting entry on June 30.
(c) Prepare the entry at maturity (December 1), assuming monthly adjusting entries have been made through November 30.
(d) What was the total financing cost (interest expense)?
Transcribed Image Text:On June 1, Chetney Company Ltd. borrows $60,000 from First Bank on a 6-month, $60,000, 8% note. The note matures on December 1. (a) Prepare the entry on June 1. (b) Prepare the adjusting entry on June 30. (c) Prepare the entry at maturity (December 1), assuming monthly adjusting entries have been made through November 30. (d) What was the total financing cost (interest expense)?
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