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On June 1,2013,Martin Company Signed a $25,000,120-Day,6% Note Payable to Cover

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Essay

On June 1,2013,Martin Company signed a $25,000,120-day,6% note payable to cover a past due account payable.This company uses a calendar year to report financial activity.
a.What is the total amount of interest to be paid on this note?
b.Prepare Martin Company's general journal entry to record the issuance of the note payable,
c.Prepare Martin Company's general journal entry to record the payment of the note on
September 29,2013 assuming no adjusting entries have been made since this note was first issued.


Definitions:

Elimination

The process of removing intercompany transactions when consolidating financial statements of a group.

Consolidation

The process of combining the financial statements of multiple subsidiaries with those of the parent company to present as a single entity.

Company Tax Rate

The percentage of a company's taxable income that it must pay to the government as corporate income tax.

Rent Revenue

Income earned by a company from renting out properties or equipment to others.

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