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Precision cast parts, a manufacturer of processed engine parts in the automotive and airline industries, about $40 .6 million in cash on october 1, 2015 to provide working capital for anticipated expansion.
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Precision signs a one -year, 8 % promissory note to midwest bank under a pre -arranged short -term line of credit.
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Interest on the note is payable at maturity.
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Each firm has a december 31st year -end.
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Number one, prepare the journal entries on october 1st, 2015 to record the issuance of the note.
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Two, record the adjustments on december 31st, 2015.
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And three, prepare the journal entry on september 30, 2016, to record payment of the notes payable at maturity.
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So part one, this is the journal entry on october 1st of 2015 to record issuance of the note.
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So the date is october 1st, 2015.
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And then the account and explanation is the next column.
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Our third column is the account or accounts to be debited.
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And lastly, we have our credit column.
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The first account is cash.
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And we are debuting cash $40 .6 million.
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So this is in millions.
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And credit is in millions as well.
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And our other account is notes payable, and we are crediting notes payable $40 .6 million.
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And this is to record receipt of cash against notes payable.
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Part two, we have the journal entry to record the adjustment on december 31st, 2015.
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So we're going to have one column is going to be the date.
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We're going to have another column for accounts and explanation.
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Then we're going to have our debit column...