C. S. Cullumber Company had the following transactions involving notes payable. July 1, 2022 Borrows $74,000 from First National Bank by signing a 9-month, 8% note. Nov. 1, 2022 Borrows $77,000 from Lyon County State Bank by signing a 3-month, 6% note. Dec. 31, 2022 Prepares adjusting entries. Feb. 1, 2023 Pays principal and interest to Lyon County State Bank. Apr. 1, 2023 Pays principal and interest to First National Bank.

The following journal entries will be passed in the books of accounts:

Explanation:

date account and explanation Debit Credit

July 1 Cash 74000

Notes payable-First national bank 74000

Nov 1 Cash 77000

Notes payable-Lyon country state bank 77000

Dec 31 Interest expense 2960

Interest payable 2960

(to record accrued interest)

Interest expense 770

Interest payable 770

(To record accrued interest)

Feb 1 Notes payable-Lyon country state bank 77000

Interest payable 770

Interest expense 385

Cash 78155

(To record amount paid)

Apr 1 Notes payable-First national bank 74000

Interest payable 2960

Interest expense 1480

Cash 78440

(To record amount paid)