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1) On November 1, 2018, Aviation Training Corp. borrows $43,000 cash from Community Savings and Loan. Aviation Training signs a three-month, 6% note...
1) On November 1, 2018, Aviation Training Corp. borrows $43,000 cash from Community Savings and Loan. Aviation Training signs a three-month, 6% note payable. Interest is payable at maturity. Aviation's year-end is December 31.
Required:
a) Record in the journal the issuance of note
b) Record in the journal the adjustment for interest
c) Record in the journal the repayment of the note at maturity
2) On August 1, 2018, Trico Technologies, an aeronautic electronics company, borrows $20.8 million cash to expand operations. The loan is made by FirstBanc Corp. under a short-term line of credit arrangement. Trico signs a six-month, 6% promissory note. Interest is payable at maturity. FirstBanc Corp.'s year-end is December 31.
Required:
1., 2.& 3. Record the necessary entries in the Journal Entry Worksheet below for FirstBanc Corp.(If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in dollars, not in millions (i.e. 5 should be entered as 5,000,000).)
a) Record in the journal the acceptance of note
b) Record in the journal the adjustment for interest
c) Record in the journal the receipt of cash at maturity
3) OS Environmental provides cost-effective solutions for managing regulatory requirements and environmental needs specific to the airline industry. Assume that on July 1 the company issues a one-year note for the amount of $4.9 million. Interest is payable at maturity.
Required:
Determine the amount of interest expense that should be recorded in a year-end adjusting entry under each of the following independent assumptions:
