Precision Castparts, a manufacturer of processed engine parts in the automotive and airline industries, borrows $39 million cash on October 1, 2024, to provide working capital for anticipated expansion. Precision signs a one-year, 7% promissory note to Midwest Bank under a prearranged short-term line of credit. Interest on the note is payable at maturity. Each company has a December 31 year-end. Required: 1. Prepare the journal entries on October 1, 2024, to record (a) the notes payable for Precision Castparts and (b) the notes receivable for Midwest Bank. 2. Record the adjusting entry on December 31, 2024, for (a) Precision Castparts and (b) Midwest Bank. 3. Prepare the journal entries on September 30, 2025, to record payment of (a) the notes payable for Precision Castparts and (b) the notes receivable for Midwest Bank. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Record the adjusting entry on December 31, 2024, for (a) Precision Castparts and (b) Midwest Bank. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions. For example, $5.5 million should be entered as 5,500,000.) View transaction list Journal entry worksheet < 1 Record the adjusting entry for interest for Precision Castparts. Note: Enter debits before credits. Date December 31, 2024 General Journal Debit Credit Interest Expense Interest Payable Record entry Clear entry View general journal < Required 1 Required 3 >
Precision Castparts, a manufacturer of processed engine parts in the automotive and airline industries, borrows $39 million cash on October 1, 2024, to provide working capital for anticipated expansion. Precision signs a one-year, 7% promissory note to Midwest Bank under a prearranged short-term line of credit. Interest on the note is payable at maturity. Each company has a December 31 year-end. Required: 1. Prepare the journal entries on October 1, 2024, to record (a) the notes payable for Precision Castparts and (b) the notes receivable for Midwest Bank. 2. Record the adjusting entry on December 31, 2024, for (a) Precision Castparts and (b) Midwest Bank. 3. Prepare the journal entries on September 30, 2025, to record payment of (a) the notes payable for Precision Castparts and (b) the notes receivable for Midwest Bank. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Record the adjusting entry on December 31, 2024, for (a) Precision Castparts and (b) Midwest Bank. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions. For example, $5.5 million should be entered as 5,500,000.) View transaction list Journal entry worksheet < 1 Record the adjusting entry for interest for Precision Castparts. Note: Enter debits before credits. Date December 31, 2024 General Journal Debit Credit Interest Expense Interest Payable Record entry Clear entry View general journal < Required 1 Required 3 >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Precision Castparts, a manufacturer of processed engine parts in the automotive and airline industries, borrows $39 million cash on
October 1, 2024, to provide working capital for anticipated expansion. Precision signs a one-year, 7% promissory note to Midwest Bank
under a prearranged short-term line of credit. Interest on the note is payable at maturity. Each company has a December 31 year-end.
Required:
1. Prepare the journal entries on October 1, 2024, to record (a) the notes payable for Precision Castparts and (b) the notes receivable
for Midwest Bank.
2. Record the adjusting entry on December 31, 2024, for (a) Precision Castparts and (b) Midwest Bank.
3. Prepare the journal entries on September 30, 2025, to record payment of (a) the notes payable for Precision Castparts and (b) the
notes receivable for Midwest Bank.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Required 3
Record the adjusting entry on December 31, 2024, for (a) Precision Castparts and (b) Midwest Bank. (Do not round intermediate
calculations. If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your
answers in dollars, not in millions. For example, $5.5 million should be entered as 5,500,000.)
View transaction list
Journal entry worksheet
<
1
Record the adjusting entry for interest for Precision Castparts.
Note: Enter debits before credits.
Date
December 31,
2024
General Journal
Debit
Credit
Interest Expense
Interest Payable
Record entry
Clear entry
View general journal
< Required 1
Required 3 >
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