Problem A Algo Record notes payable and notes receivable LO
Precision Castparts, a manufacturer of processed engine parts in the automotive and airline industries, borrows $ million
cash on October to provide working capital for anticipated expansion. Precision signs a oneyear, promissory note
to Midwest Bank under a prearranged shortterm line of credit. Interest on the note is payable at maturity. Each company has a
December yearend.
Required:
Prepare the journal entries on October to record a the notes payable for Precision Castparts and b the notes
receivable for Midwest Bank.
Record the adjusting entry on December for a Precision Castparts and b Midwest Bank.
Prepare the journal entries on September to record payment of a the notes payable for Precision Castparts and
b the notes receivable for Midwest Bank.
