On January 1, 2018, Nantucket Ferry borrowed $14,000,000 cash from BankOne and issued a four-year,$14,000,000, 6% note. Interest was payable annually on December 31. Prepare the journal entries for both firmsto record interest at December 31, 2018.

On January 1, 2018, Nantucket Ferry borrowed $14,000,000 cash from BankOne and issued a four-year,$14,000,000, 6% note. Interest was payable annually on December 31. Prepare the journal entries for both firmsto record interest at December 31, 2018.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

On January 1, 2018, Nantucket Ferry borrowed $14,000,000 cash from BankOne and issued a four-year,
$14,000,000, 6% note. Interest was payable annually on December 31. Prepare the journal entries for both firms
to record interest at December 31, 2018.

Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

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