Precision Castparts, a manufacturer of processed engine parts in the automotive and airline industries, borrows $40.

Precision Castparts, a manufacturer of processed engine parts in the automotive and airline industries, borrows $40.1 million cash on October 1, 2018, to provide working capital for anticipated expansion. Precision signs a one-year, 9% promissory note to Midwest Bank under a prearranged short-term line of credit. Interest on the note is payable at maturity. Each firm has a December 31 year-end.

 10.

value:

10.00 points

Required information

Prepare the journal entries on October 1, 2018, to

  • record the issuance of the note Record the issuance of the note by Precision Castparts.
  • Record the acceptance of the note by Midwest Bank.
  • Record the adjustment for interest for Precision Castparts.
  • Record the adjustment for interest for Midwest Bank
  • Record the repayment of the note at maturity for Precision Castparts.
  • Record the receipt of cash at maturity for Midwest Bank

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