Question: 1. On July 1, Alaskan Adventures issues a $100,000, eight-month, 6% note. Interest is payable at maturity. What is the amount of interest expense that the company would record in a year-end adjustment on December 31?
2. On April 1, Online Travel issues $12 million of commercial paper with a maturity on December 31 and an 8% interest rate. Record the issuance of the commercial paper and its repayment at maturity.
3. On September 1, 2012, Southwest Airlines borrows $40 million, of which $8 million is due next year. Show how Southwest Airlines would record the $40 million debt on its December 31, 2012, balance sheet.