Question

est County Bank agrees to lend Cullumber Company $496000 on January 1. Cullumber Company signs a $496000, 6%, 6-month note. What entry will Cullumber Company make to pay off the note and interest at maturity assuming that interest has been accrued to June 30? Interest Payable 7440 Notes Payable 496000 Interest Expense 7440 Cash 510880 Interest Expense 14880 Notes Payable 496000 Cash 510880 Notes Payable 510880 Cash 510880 Notes Payable 496000 Interest Payable 14880 Cash 510880

Answer 1

Answer:

Dr Notes Payable $496,000

Dr Interest Payable $14,880

Cr Cash $510,880

Explanation:

Preparation of the journal entry that Cullumber Company will make to pay off the note and interest at maturity assuming that interest has been accrued to June 30

Dr Notes Payable $496,000

Dr Interest Payable $14,880

($496000*6%*6/12)

Cr Cash $510,880

($496,000+$14,880)

(To record note and interest at maturity)