On September 1, 2011, Tri-State Paving Inc., an asphalt resurfacing and repairing company, borrowed $6 million cash to fund a twenty mile highway project. The loan was made by Alabama TrustCorp under a noncommitted short-term line of credit arrangement. Tri-State issued a 6-month, 14% promissory note. Interest was payable at maturity. Tri-State's fiscal period is the calendar year.
Required:
1. Prepare the journal entry for the issuance of the note by Tri-State Paving Inc.
2. Prepare the appropriate adjusting entry for the note by Tri-State on December 31, 2011.
3. Prepare the journal entry for the payment of the note at maturity.