The following selected transactions relate to liabilities of Food Emporium whose fiscal year ends on December 31.January 26Negotiated a line of credit with City Bank that can be renewed annually upon bank approval. The amount available under the line of credit is $1 million at the bank's prime rate.March 1Arranged a six-month bank loan of $400,000 with City Bank under the line of credit agreement. Interest at the prime rate of 8% is payable at maturity.September 1Paid the 8% note at maturity.
What will be an ideal response?
| January 26 | Debit | Credit |
| No Journal Entry | ? | ? |
| March 1 | ? | ? |
| Cash | 400,000 | ? |
| Notes Payable | ? | 400,000 |
| (Issuance of notes payable) | ? | ? |
| September 1 | ? | ? |
| Notes Payable | 400,000 | ? |
| Interest Expense [(400,000 × .08) × 6/12] | 16,000 | ? |
| Cash | ? | 416,000 |
| (Payment of notes payable and interest) | ? | ? |
Business
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