Question

Styles 1. On September 1, 2020, Cole Company borrowed $300,000 from National Bank on a 5-month, 8% note. On December 31, 2020, Cole Company accrued interest (assume adjusting entries are only made at the end of the year). On January 31, 2021, the note was repaid with all of the interest due. Prepare the entries to record the issuance of the note, the accrual of interest, and the re payment of the note. (4 points) Date Description Debit Credit

          Styles
1. On September 1, 2020, Cole Company borrowed $300,000 from National Bank
on a 5-month, 8% note. On December 31, 2020, Cole Company accrued interest
(assume adjusting entries are only made at the end of the year). On January 31,
2021, the note was repaid with all of the interest due.
Prepare the entries to record the issuance of the note, the accrual of interest, and
the re payment of the note. (4 points)
Date
Description
Debit
Credit

Styles
1. On September 1, 2020, Cole Company borrowed 300,000 from National Bank
on a 5-month, 8% note. On December 31, 2020, Cole Company accrued interest
(assume adjusting entries are only made at the end of the year). On January 31,
2021, the note was repaid with all of the interest due.
Prepare the entries to record the issuance of the note, the accrual of interest, and
the re payment of the note. (4 points)
Date
Description
Debit
Credit

Added by Alejandra P.

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

Instant Answer

Solved by Expert Rupsa Sarkar

Step 1

The company borrowed $300,000 for 4 months (September 1, 2020 to January 31, 2021) at 8% annual interest rate. Interest = Principal × Rate × Time Interest = $300,000 × 8% × (4/12) = $300,000 × 0.08 × 0.333 = $8,000 Show more…

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On September 1, 2020, Cole Company borrowed $300,000 from National Bank on a 5-month, 8% note. On December 31, 2020, Cole Company accrued interest (assuming adjusting entries are only made at the end of the year). On January 31, 2021, the note was repaid with all the interest due. Prepare the entries to record the issuance of the note, the accrual of interest, and the repayment of the note.