Chapter 11, Problem 2PSA

(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.

Current Liability: Every company has some debts or liabilities which need to be paid in less than one year or during current accounting period. Those debts or liabilities are called current liabilities.

To record: The journal entries for Company B.

(b)

To determine

To prepare: The accounts of notes payable, interest payable and interest expense.

(c)

To determine

To prepare: The partial balance sheet to show notes and interest payable at December 31.

(d)

To determine

To compute: Total interest expense for the year.