On December 1, Williams Company borrowed $45,000 cash from Second National Bank by signing a 90-day, 9% note payable.a. Prepare Williams' journal entry to record the issuance of the note payable.b. Prepare Williams' journal entry to record the accrued interest due at December 31.c. Prepare Williams' journal entry to record the payment of the note on March 1 of the next year.
What will be an ideal response?
| a. 12/1 | Cash………………………………………… | 45,000 |
| ? | Note Payable…………………………. | 45,000 |
| b. 12/31 | Interest Expense ($45,000 * .09 * 30/360)… | 337.50 |
| ? | Interest Payable…………………… | 337.50 |
| c. 3/1 | Note Payable……………………………… | 45,000 |
| Interest Payable……………………………. | 337.50 |
| Interest Expense ($45,000 * .09 * 60/360)…. | 675.00 |
| ? | Cash…………………………………... | 46,012.50 |
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