Precision Castparts, a manufacturer of processed engine parts in the automotive and airline industries, borrows $40.5 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.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Precision Castparts, a manufacturer of processed engine parts in the automotive and airline industries, borrows $40.5 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.
es
Required 1 Required 2
Required 3
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. (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
View journal entry worksheet
General Journal
No
Date
1
October 01,
2024
Cash
Notes Payable
October 01,
2
Notes Receivable
2024
Cash
Debit
Credit
< Required 1
Required 2 >
**
(×
Convenant
Transcribed Image Text:Precision Castparts, a manufacturer of processed engine parts in the automotive and airline industries, borrows $40.5 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. es Required 1 Required 2 Required 3 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. (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 View journal entry worksheet General Journal No Date 1 October 01, 2024 Cash Notes Payable October 01, 2 Notes Receivable 2024 Cash Debit Credit < Required 1 Required 2 > ** (× Convenant
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