The Following Transactions Were Incurred by Showboat Inc

Essay

The following transactions were incurred by Showboat Inc.:
July 31 Borrowed $100,000 from a local bank and signed a 120-day, 12% note payable.
November 1 Bought a new office building for $250,000, paying $50,000 cash and signing a 5-year, 10% note payable for the remainder. Interest is due at maturity.
December 1 Bought a new automobile for $20,000, paying $1,000 cash and signing a 2-year, 6% note payable for the remainder. The monthly note is $886, and the first installment is due December 31.
Required:
Required:
a. Prepare journal entries for these transactions. (Assume a 365-day year and round all amounts to the nearest cent.)
b. What date is the July 31 note due?
c. Prepare a journal entry to recognize payment of the July 31 note payable.
d. Prepare a journal entry to recognize the interest accrual at December 31 on the November 1 note payable.
e. Prepare a journal entry to recognize the first installment payment on the December 1 note payable.
f. Calculate the balance of the December 1 note payable at December 31.