Question - Drake Consulting performs systems consulting and also sells accounting software. Drake Consulting believes the company will need to borrow $ 400 comma $400,000 in order to expand operations. Drake consults the bank and secures a 66%, five-year note on March1, 2015. Drake must pay the bank principal in five equal installments plus interest annually on March 1.
Requirements
1. Record the $400,000 note payable on March1, 2015.
2. Record the entry to accrue interest due on the note at December 31, 2015.
3. Record the entry Drake would make to record the payment to the bank on March 1, 2016.