Precision Castparts, a manufacturer of processed engine parts in the automotive and airline industries, borrows $40.7 million cash on October 1, 2021, to provide working capital for anticipated expansion. Precision signs a one-year, 9% promissory note to Midwest Bank under a prearranged short-term line of credit. Interest on the note is payable at maturity. Each firm has a December 31 year-end. Required: 1. Prepare the journal entries on October 1, 2021, to record the issuance of the note Record the issuance of the note by Precision Castparts. Record the acceptance of the note by Midwest Bank. Note: Enter debits before credits.
Precision Castparts, a manufacturer of processed engine parts in the automotive and airline industries, borrows $40.7 million cash on October 1, 2021, to provide working capital for anticipated expansion. Precision signs a one-year, 9% promissory note to Midwest Bank under a prearranged short-term line of credit. Interest on the note is payable at maturity. Each firm has a December 31 year-end. Required: 1. Prepare the journal entries on October 1, 2021, to record the issuance of the note Record the issuance of the note by Precision Castparts. Record the acceptance of the note by Midwest Bank. Note: Enter debits before credits.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Precision Castparts, a manufacturer of processed engine parts in the automotive and airline industries, borrows $40.7 million cash on October 1, 2021, to provide
Required:
1. Prepare the
- Record the issuance of the note by Precision Castparts.
- Record the acceptance of the note by Midwest Bank.
-
Note: Enter debits before credits.
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