Chapter 11, Problem 2E

(a)

To determine

Journal entries: Entries to record the financial transactions during each accounting period are called journal entries. Income, liabilities and the giver are credited if the balance is increased and debited if the balance is reduced Expenses, assets and the receiver are debited if the balance is increased and credited if the balance is reduced in a journal entry.

Adjusting journal entries: Companies need to record the journal entries at the end of accounting period to apply the matching and revenue recognition principles. These journal entries are adjusting entries.

To prepare: The journal entry for issuance of notes payable.

(b).

To determine

To prepare: Adjusting journal entry on June 30.

(c).

To determine

To prepare: The journal entry to record the payment of notes payable.

(d).

To determine

To Compute: The total interest expense on 8%, 6-month notes payable of $90,000.