Chapter 11, Problem 1APSA

To determine

Notes Payable:

It is a negotiable debt instrument used to borrow money for the business operation purpose for specified period of time with certain interest.

Maturity Date:

The date at which the agreement or terms of a note payable is terminated is called maturity date.

To determine:

1. Determine the maturity date for each of the three notes.

2. Compute the interest due at maturity for each of the three notes.

3. Compute the interest expense to be recorded in the adjusting entry at the end of 2014.

4. Determine the expense to be recorded in 2015.

5. Prepare journal entries to record the preceding transactions and events for years 2014 and 2015.