On January 1, 2011, Bixby Corporation borrowed $80,000 on a 2-year interest bearing note from Cache Bank at an annual interest rate of 8 percent (Note A). Also on January 1, 2011, Bixby borrowed $50,000 from Dewey Bank, signing a 3-year interest bearing note at an annual interest rate of 14 percent (Note B). For both notes, interest is payable yearly on January 1. Prepare the following journal entries. (Round all amounts to the nearest dollar.)
1. January 1, 2011 borrowings on:
a. Note A
b. Note B
2. Recognition of interest December 31, 2011 (Interest on both notes can be in one entry).
3. Interest payment on January 1, 2012 (Interest on both notes can be in one entry).
4. Repayment of Note B on January 1, 2014.

Question

On January 1, 2011, Bixby Corporation borrowed $80,000 on a 2-year interest bearing note from Cache Bank at an annual interest rate of 8 percent (Note A). Also on January 1, 2011, Bixby borrowed $50,000 from Dewey Bank, signing a 3-year interest bearing note at an annual interest rate of 14 percent (Note B). For both notes, interest is payable yearly on January 1. Prepare the following journal entries. (Round all amounts to the nearest dollar.)
 1.	January 1, 2011 borrowings on:
 	a.	Note A
 	b.	Note B
2.	Recognition of interest December 31, 2011 (Interest on both notes can be in one entry).
3.	Interest payment on January 1, 2012 (Interest on both notes can be in one entry).
4.	Repayment of Note B on January 1, 2014.

Quizplus · Accepted Answer

The Answer of On January 1, 2011, Bixby Corporation borrowed $80,000 on a 2-year interest bearing note from Cache Bank at an annual interest rate of 8 percent (Note A). Also on January 1, 2011, Bixby borrowed $50,000 from Dewey Bank, signing a 3-year interest bearing note at an annual interest rate of 14 percent (Note B). For both notes, interest is payable yearly on January 1. Prepare the following journal entries. (Round all amounts to the nearest dollar.)
 1.	January 1, 2011 borrowings on:
 	a.	Note A
 	b.	Note B
2.	Recognition of interest December 31, 2011 (Interest on both notes can be in one entry).
3.	Interest payment on January 1, 2012 (Interest on both notes can be in one entry).
4.	Repayment of Note B on January 1, 2014.

On January 1, 2011, Bixby Corporation Borrowed $80,000 on a 2-Year