Answer:
Explanation:
(a). The journal entry for issuance of note is shown below:
Accounts payable A/c Dr $10,000
To Notes Payable $10,000
(Being notes payable is issued)
(b). The journal entry for payment of the note at the time of maturity is shown below:
Notes Payable A/c Dr $10,000
Interest expense A/c Dr $200*
To Cash $10,200
(Being payment of note with interest is recorded)
* The computation of interest expense is shown below
= Issued amount × rate of interest × number of days ÷ total number of days
= $10,000 × 6% × 120/360
= $200
