Current Liabilities and Payroll Accounting

Problem-07: Current Liabilities and Payroll Accounting

On June 1, Merando Company borrows $90,000 from First Bank on a 6-month, $90,000, 8% note

Instructions

  1. Prepare the entry on June 1
  2. Prepare the adjusting entry on June 30.
  3. Prepare the entry at maturity (December 1), assuming monthly adjusting entries have been made through November 30.
  4. What was the total financing cost (interest expense)?

Solution

Merando Company

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