The following selected transactions relate to liabilities of Rose Dish Corporation. Rose's fiscal year ends on December 31.

Required:
Prepare the appropriate journal entries through the maturity of each liability.

2018
Feb. 3 Negotiated a revolving credit agreement with Second Bank, which can be renewed annually upon bank approval. The amount available under the line of credit is $30,000,000 at the bank's prime rate.
April 1 Arranged a 3-month bank loan of $12 million with Second Bank under the line of credit agreement. Interest at the prime rate of 8% was payable at maturity.
July 1 Paid the 8% loan at maturity.
Nov. 1 Supported by the credit agreement, issued $20 million of commercial paper on a 9-month note. Interest was discounted at issuance at a 6% discount rate.
Dec. 31 Recorded any necessary adjusting entry(s).

2019
Aug. 1 Paid the commercial paper at maturity.

Question

The following selected transactions relate to liabilities of Rose Dish Corporation. Rose's fiscal year ends on December 31.

Required:
Prepare the appropriate journal entries through the maturity of each liability.

2018
Feb. 3	Negotiated a revolving credit agreement with Second Bank, which can be renewed annually upon bank approval. The amount available under the line of credit is $30,000,000 at the bank's prime rate. 
April 1	Arranged a 3-month bank loan of $12 million with Second Bank under the line of credit agreement. Interest at the prime rate of 8% was payable at maturity.
July 1	Paid the 8% loan at maturity.
Nov. 1	Supported by the credit agreement, issued $20 million of commercial paper on a 9-month note. Interest was discounted at issuance at a 6% discount rate.
Dec. 31	Recorded any necessary adjusting entry(s).

2019
Aug. 1	Paid the commercial paper at maturity.

Quizplus · Accepted Answer

The Answer of The following selected transactions relate to liabilities of Rose Dish Corporation. Rose's fiscal year ends on December 31.

Required:
Prepare the appropriate journal entries through the maturity of each liability.

2018
Feb. 3	Negotiated a revolving credit agreement with Second Bank, which can be renewed annually upon bank approval. The amount available under the line of credit is $30,000,000 at the bank's prime rate. 
April 1	Arranged a 3-month bank loan of $12 million with Second Bank under the line of credit agreement. Interest at the prime rate of 8% was payable at maturity.
July 1	Paid the 8% loan at maturity.
Nov. 1	Supported by the credit agreement, issued $20 million of commercial paper on a 9-month note. Interest was discounted at issuance at a 6% discount rate.
Dec. 31	Recorded any necessary adjusting entry(s).

2019
Aug. 1	Paid the commercial paper at maturity.

The Following Selected Transactions Relate to Liabilities of Rose Dish