Moss County Bank agrees to lend the Oriole Company $560000 on January 1. Oriole Company signs a $560000, 6%, 9-month note. What entry will Oriole Company make to pay off the note and interest at maturity assuming that interest has been accrued to September 30

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Business

Damian White

27 August, 11:50

Moss County Bank agrees to lend the Oriole Company $560000 on January 1. Oriole Company signs a $560000, 6%, 9-month note. What entry will Oriole Company make to pay off the note and interest at maturity assuming that interest has been accrued to September 30

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Answers (1)

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Jonathan Hanna · Answer 1

The Journal entry that Oriole Company will make to pay off the note and interest at maturity assuming that interest has been accrued to September 30 will be:

Dr Notes Payable 560,000

Dr Interest Payable 25,200

(560,000*6%*9/12)

Cr Cash 585,200

(560,000+25,200)

Explanation:

Based on the information given where Moss County Bank agrees to lend the Oriole Company $560000 on January 1 this means we have to Debit Note payable with 560,000 and since Oriole Company signs a $560000, 6%, 9-month this means we have to Debit Interest payable with 25,200 (560,000*6%*9/12) and Credit Cash with 585,200 (560,000+25,200).