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Littor Industries: Annual Interest Payaments

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Littor Industries issued a $100,000, 4-year, 11% note at face value to Forest Hills Bank on January 1, 2005, and received $100,000 cash. The notes requires annual interest payments each December 31.

Prepare Littor's journal entries to record:
(a) the issuance of the note and
(b) the December 31 interest payment.

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Solution Summary

Guidelines are provided on how to prepare journal entries for Littor Industries.

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a) Issuance of note

Jan 1, 2005

DR Cash $100,000
CR ...

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