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week 4 E13-1 - 2 Prepare the appropriate adjusting entry...

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E 13-1 Bank loan; accrued interest LO2 LO3 On November 1, 2006, Quantum Technology, a geothermal energy supplier, borrowed $ 8,186,000 cash to fund a geological survey. The loan was made by Nevada BancCorp under a noncommitted short-term line of credit arrangement. Quantum issued a nine-month, 11 % promissory note. Interest was payable at maturity. Quantum’s fiscal period is the calendar year. Required: 1. Prepare the journal entry for the issuance of the note by Quantum Technology.
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Unformatted text preview: 2. Prepare the appropriate adjusting entry for the note by Quantum on December 31, 2006. 3. Prepare the journal entry for the payment of the note at maturity. Enter answers in dollars not millions of dollars. Round answers to nearest whole number. 1. Cash 8186000 Notes payable 8186000 2. Interest expense 150,077 Interest payable 150,077 3. Interest expense 525,268 Interest payable 150,077 Notes payable 8,186,000 Cash 8,861,345...
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