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.
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