Sharp Company Borrowed $500,000 on a 6% One-Year,interest-Bearing Note Dated

question 102

Essay

Sharp Company borrowed $500,000 on a 6% one-year,interest-bearing note dated November 1,2019 with interest payable at maturity.The annual accounting period ends on December 31.Assume that adjusting entries are only made at December 31,the company's fiscal year-end.
Prepare journal entries for each of the following dates:
A.November 1,2019.
B.December 31,2019.
C.October 31,2020.

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Definitions:

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the asset's consumption, wear and tear, or obsolescence.

Direct Method

A method of preparing the cash flow statement in which actual cash flow information from the company’s operations segment is used, instead of adjustments to net income.

Direct Method

A means of presenting the cash flow statement where cash receipts and cash payments from operating activities are listed directly.

Retirement Of Debt

The process of paying off debt obligations, either by making scheduled payments or through a lump-sum payment.