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Question - Mumford Co. borrowed $100,000 in cash via a note payable on June 1, Year 1, with 9% interest. The note is due on May 31, Year 2.
Required -
a) Prepare the journal entry to record the issuance of the note and receipt of cash on June 1, Year 1.
b) Prepare the adjusting journal entry to record the interest owed at the end of the accounting period on December 31, Year 1.
c) Prepare the journal entries to record the interest and principal payments to the lender on May 31, Year 2.
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