Great Adventures obtains a $30,000 low-interest loan for the company from the city council, which has recently passed an initiative encouraging business development related to outdoor activities. The loan is due in three years, and 6% annual interest is due each year on July 31. Record the appropriate journal entry.

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Business

Johnathon Costa

21 January, 09:40

Great Adventures obtains a $30,000 low-interest loan for the company from the city council, which has recently passed an initiative encouraging business development related to outdoor activities. The loan is due in three years, and 6% annual interest is due each year on July 31. Record the appropriate journal entry.

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Velez · Answer 1

The journal entry at the time when great adventures obtains the $30,000 loan is:

Account Title Debit Credit

Cash 30,000

Notes Payable 30,000

The interest accrued at the end of each month would be:

30,000 * 6% = 1,800/12 = $ 150

Interest entry would be made at the end of each month to record the interest expense.