Chap013 - Student Name Instructor Class McGraw-Hill/Irwin...

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Student Name: Instructor Class: McGraw-Hill/Irwin Problem 13-01 BLANTON PLASTICS General Journal Account Debit Credit Blanton Plastics Cash 14,000,000 Notes payable 14,000,000 «- Correct! L & T Bank Notes receivable 14,000,000 Cash 14,000,000 «- Correct! Adjusting Entries (December 31, 2011) Blanton Plastics Interest expense 420,000 Interest payable 420,000 «- Correct! L & T Bank Interest receivable 420,000 Interest revenue 420,000 «- Correct! Maturity (January 31, 2012) Blanton Plastics Interest expense 140,000 Interest payable 420,000 Notes payable 14,000,000 Cash 14,560,000 «- Correct! L & T Bank Cash 14,560,000 «- Correct! Interest revenue 140,000 Interest receivable 420,000 Notes receivable 14,000,000 Issuance of Note (October 1, 2011) Cash 13,440,000 Discount on notes payable 560,000 Notes payable 14,000,000 «- Correct! Adjusting Entry (December 31, 2011) Interest expense 420,000 Interest payable 420,000 «- Correct! Maturity (January 31, 2012) Interest expense 140,000 Discount on notes payable 140,000 «- Correct! Notes payable 14,000,000 Cash 14,000,000 «- Correct! Effective interest rate: Discount $ 560,000 Cash proceeds $ 13,440,000 Interest rate for 4 months 4.1667% Annual effective rate 12.5% «- Correct!
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Given Data P13-01: BLANTON PLASTICS Cash borrowed, 10/1/2011 $ 14,000,000 Term of promissory note 4 months Promissory note interest 12%
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