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    Preparing Entries for Businesses

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    E11-1 On June 1, Padillio Company borrows $70,000 from First Bank on a 6-month, $70,000, 12% note.

    Instructions
    (a) Prepare the entry on June 1.
    (b) Prepare the adjusting entry on June 30.
    (c) Prepare the entry at maturity (December 1), assuming monthly adjusting entries have been
    made through November 30.
    (d) What was the total financing cost (interest expense)?

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    Solution Preview

    (a) Prepare the entry on June 1.
    June 1 Cash 70,000
    Notes Payable 70,000

    (b) Prepare the adjusting entry on June 30. ...

    Solution Summary

    This solution involving preparing entries for a company's accounts.

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