Megan Haak and Kathy Quandt borrowed $15,000 on a 7 month, 8 percent note from Golden State Bank to open their business, MK's Coffee House. The money was borrowed on June 1, 2012, and the note matures January 1, 2013. Make entries for interest-bearing notes.
Instructions:
a) Make the entry to record the receipt of the funds from the loan.
b) Make the entry to accrue the interest on June 30.
c) Supposing adjusting entries are made at the end of each month, find out the balance in the interest payable account at December 31, 2012.
d) Make the entry required on January 1, 2013, when the loan is paid back.