Notes Payable

On November 1, 2011, Johnson Company borrowed $1,000 from Boston Company on a 3-month 6% note payable.

Answer the following questions:

1. On what date will the note have to be paid back?

2. What amount will be paid back?

3. What journal entry will be made when the money is borrowed?

4. If the company closes the books and publishes financial statements on 12/31, will an adjusting entry need to be made on that date? (Create the journal entry.)

5. What entry will be made when the note is paid off?

6. Can you show the corresponding entries for Boston Company for the three dates?