Sunland Company had the following transactions involving notes payable.July 1, 2022 Borrows $56,000 from First National Bank by signing a 9-month, 8% note.Nov. 1, 2022 Borrows $67,200 from Lyon County State Bank by signing a 3-month, 6% note.Dec. 31, 2022 Prepares adjusting entries.Feb. 1, 2023 Pays principal and interest to Lyon County State Bank.Apr. 1, 2023 Pays principal and interest to First National Bank.Prepare journal entries for each of the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) ### Transactions Involving Notes Payable**Sunland Company** had the following transactions involving notes payable:1. **July 1, 2022:** Borrows $56,000 from First National Bank by signing a 9-month, 8% note.2. **Nov. 1, 2022:** Borrows $67,200 from Lyon County State Bank by signing a 3-month, 6% note.3. **Dec. 31, 2022:** Prepares adjusting entries.4. **Feb. 1, 2023:** Pays principal and interest to Lyon County State Bank.5. **Apr. 1, 2023:** Pays principal and interest to First National Bank.### Journal Entry InstructionsPrepare journal entries for each of the transactions:- **Credit account titles are automatically indented when the amount is entered.**- **Do not indent manually.**- **Record journal entries in the order presented in the problem.**### Journal Entry Table| Date | Account Titles and Explanation | Debit | Credit ||------------|--------------------------------|-------|--------|| | | | || | | | || | | | || | | | |*(To record adjusting entry for First National Bank note)*### ExplanationThis table structure is used for recording financial transactions in accounting. Each transaction involves a date, an explanation of the accounts affected, and the amounts debited and credited. The transactions are sequentially recorded to ensure accurate financial reporting and compliance with accounting principles.**Graph/Diagram Explanation:**The table format is standard for journal entries, which include:- **Date Column:** Specifies when the transaction occurs.- **Account Titles and Explanation Column:** Describes which accounts are impacted and any pertinent details.- **Debit Column:** Amounts to be debited from respective accounts.- **Credit Column:** Amounts to be credited to respective accounts.The goal is to maintain a balanced ledger where total debits equal total credits. This practice ensures transparency and accuracy in financial documentation. The image appears to be a template for recording financial transactions, likely intended for use in an accounting or finance educational context.---**Transaction Recording Template:**1. **Adjustment Entries:** - **First National Bank Note:** - Description: (To record adjusting entry for First National Bank note) - Fields: Debit, Credit, and Reference (across horizontal lines for data entry)2. **Date: February 1, 2023:** - **Lyon County State Bank Note:** - Description: (To record adjusting entry for Lyon County State Bank note) - Fields: Debit, Credit, and Reference (across horizontal lines for data entry)3. **Date: April 1, 2023:** - Fields: Debit, Credit, and Reference (across horizontal lines for data entry)---There are blank spaces provided for entering the specific details of transactions, including the date, debit and credit amounts, and any additional references required for bookkeeping purposes. No graphs or diagrams are present in the image.

Note payable is a kind of loan which is repaid after certain period of time with specific rate of interest also. At the closure of books of accounts ,we need to passed an entry for accured interest.

Answered: Sunland Company had the following…

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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July 1, 2022		Borrows $56,000 from First National Bank by signing a 9-month, 8% note.
Nov. 1, 2022		Borrows $67,200 from Lyon County State Bank by signing a 3-month, 6% note.
Dec. 31, 2022		Prepares adjusting entries.
Feb. 1, 2023		Pays principal and interest to Lyon County State Bank.
Apr. 1, 2023		Pays principal and interest to First National Bank.