Question: Kwon Co. borrows $150,000 cash on November 1, 2011, by signing a 90-day, 9% note with a face value of $150,000.
1. On what date does this note mature? (Assume that February of 2011 has 28 days.)
2. How much interest expense results from this note in 2011? (Assume a 360-day year.)
3. How much interest expense results from this note in 2012? (Assume a 360-day year.)
4. Prepare journal entries to record
(a) issuance of the note,
(b) accrual of interest at the end of 2011, and
(c) payment of the note at maturity