Question

Entries for notes payable Bennett Enterprises issues a $400,000, 90-day, 5% note to Spectrum Industries for merchandise inventory. Assume a 360-day year. For a compound transaction, if an amount box does not require an entry, leave it blank. a. Journalize Bennett Enterprises' entries to record:_____ 1. the issuance of the note. 2. the payment of the note at maturity. b. Journalize Spectrum Industries' entries to record: 1. the receipt of the note. 2. the receipt of the payment of the note at maturity.

Answer 1

Answer:

The Journal entries are as follows:

(a) 1. Cash A/c Dr. $400,000

           To notes payable      $400,000

(To record the issuance of the note)

2. Notes payable A/c Dr. $400,000

Interest payable A/c Dr. $5,000

        To cash                                      $405,000

(To record the payment of the note at maturity)

Workings:

Interest payable = Amount × Interest rate × Time period

                           = $400,000 × 5% × (90 ÷ 360)

                           = $5,000

(b) 1. Note receivable A/c Dr. $400,000

                 To cash Ac                              $400,000

(To record the receipt of the note)

2. Cash A/c Dr. $405,000

           To notes receivable        $400,000

           To Accrued interest        $5,000

(To record the receipt of the payment of the note at maturity)

Answer 2

Journal entries are termed as the entries that record the exchange transactions of the company. Journal entry is the initial recording of the monetary business transactions in the books of accounts.  Each business transaction has dual effects in the books of accounts.  

The Journal Entries have been attached below.  

Workings:

$\begin{aligned}\text{Interest payable} &= \text{Amount} \times \text{Interest rate} \times \text{Time period}\\&=\ 400,000 \times 5\% \times \frac{90}{360}\\&= \ 5,000\end{aligned}$

To know more about the journal entries of the various other industries, refer to the link below:

https://brainly.com/question/14665178