Prepare the appropriate journal entries through the maturity

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Question - The following selected transactions relate to liabilities of United Insulation Corporation. United's fiscal year ends on December 31.

2021

Jan. 13 Negotiated a revolving credit agreement with Parish Bank that can be renewed annually upon bank approval. The amount available under the line of credit is $30.0 million at the bank's prime rate.

Feb. 1 Arranged a three-month bank loan of $6.5 million with Parish Bank under the line of credit agreement. Interest at the prime rate of 11% was payable at maturity.

May 1 Paid the 11% note at maturity.

Dec. 1 Supported by the credit line, issued $18.6 million of commercial paper on a nine-month note. Interest was discounted at issuance at a 10% discount rate.

Dec.  31 Recorded any necessary adjusting entry(s).

2022

Sept. 1 Paid the commercial paper at maturity.

Required - Prepare the appropriate journal entries through the maturity of each liability.

Reference no: EM132680759

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