On October 1, Steve's Carpet Service Borrows $350,000 from First

question 26

Short Answer

On October 1, Steve's Carpet Service borrows $350,000 from First National Bank on a 3-month, $350,000, 8% note. The entry by Steve's Carpet Service to record payment of the note and accrued interest on January 1 is
$\begin{array}{lrr} \text {Notes Payable } &357,000\\ \text { Cash } &&357,000\\\\ \text {Notes Payable } &350,000\\ \text { Interest Payable } &7,000\\ \text { Cash } &&357,000\\\\ \text { Notes Payable } &350,000\\ \text { Interest Payable } &28,000\\ \text { Cash } &&378,000\\ \text {Notes Payable } &350,000\\ \text { Interest Expense} &7,000\\ \text { Cash } &&357,000\\\end{array}$

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