On March 1, Year 1, a company loans cash to another company and accepts a note in return. The terms of the note are provided below. Issue Date Principal Rate Maturity Date March 1, Year 1 120,000 10% March 1, Year 4 Required: 1. Prepare the journal entry to be made when the company makes the loan and accepts the note in return. 2. Calculate the interest revenue to be recorded at the end of each year the note is outstanding. 3. Prepare the journal entries to accrue the interest receivable for each year the note is outstanding. 4. Prepare the journal entry to record receiving the cash at the note's maturity.

On March 1, Year 1, a company loans cash to another company and accepts a note in return. The terms of the note are provided below. Issue Date Principal Rate Maturity Date March 1, Year 1 120,000 10% March 1, Year 4 Required: 1. Prepare the journal entry to be made when the company makes the loan and accepts the note in return. 2. Calculate the interest revenue to be recorded at the end of each year the note is outstanding. 3. Prepare the journal entries to accrue the interest receivable for each year the note is outstanding. 4. Prepare the journal entry to record receiving the cash at the note's maturity.

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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