Problem- NOTE COMPUTATIONS AND ENTRIES (STRAIGHT LINE)
On December 31, 2009, Benton Corporation borrowed $1,000,000 with a 10-year, 8.75 percent note, interest payable semiannually on June 30 and December 31. Cash in the amount of $985,500 was received when the note was issued.
Required:
1. Provide the necessary journal entry at December 31, 2009.
2. Provide the necessary journal entry at June 30, 2010.
3. Provide the necessary journal entry at December 31, 2010.
4. Determine the carrying amount of this note at the end of the fifth year (December 31, 2014).