On November 1, Casey's Snowboards signed a $12,000, 90-day, 5% note payable to cover a past due account payable. a. What amount of interest expense on this note should Casey's Snowboards report on year-end December 31?b. Prepare Casey's journal entry to record the issuance of the note payable.c. Prepare Casey's adjusting journal entry at the end of the yeard. Prepare Casey's journal entry to record the payment of the note on January 30 of the following year.
What will be an ideal response?
| a. | Interest expense = $12,000 * 0.05 * 60/360 = $100 | ? | ? | |
| ? | ? | ? | ? | ? |
| b. | 11/1 | Accounts Payable | 12,000 | ? |
| ? | ? | Notes Payable | ? | 12,000 |
| ? | ? | ? | ? | ? |
| c. | 12/31 | Interest Expense | 100 | ? |
| ? | ? | Interest Payable | ? | 100 |
| ? | ? | ? | ? | ? |
| d. | 1/30 | Notes Payable | 12,000 | ? |
| ? | ? | Interest Payable | 100 | ? |
| ? | ? | Interest Expense ($12,000 * 0.05 * 30/360) | 50 | ? |
| ? | ? | Cash | ? | 12,150 |
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