Question

Moss County Bank agrees to lend the Sadowski Brick Company $500,000 on January 1. Sadowski Brick Company signs a $500,000, 6%, 9-month note and closes its books on June 30 each year. The entry made by Sadowski Brick Company on January 1 to record the proceeds and issuance of the note is__________

Answer 1

Answer:

Explanation:

The journal entry for issuance of the note payable is shown below:

Cash A/c Dr $500,000

  To Notes payable     $500,000

(Being note is issued)

The other things like interest rate, duration is not considered because the question has asked to pass the journal entry for the issue of notes not for any interest expense. That's why we ignored it