For Dougald Construction record the receipt of the cash

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Question - Dougald Construction Ltd. borrowed $250,000 from Atco Finance Ltd. on October 1, 2020, by issuing a nine-month note payable at 5% interest payable at maturity. Both companies have a December 31 year end and make adjusting entries annually.

Required -

1. For Dougald Construction, record (1) the receipt of the $250,000 cash and the issuing of the note payable on October 1, 2020; (2) the accrual of interest on December 31, 2020; and (3) the payment of the note and interest on July 1, 2021.

2. For Atco Finance, record (1) the payment of the $250,000 cash and the receipt of the note receivable on October 1, 2020; (2) the accrual of interest on December 31, 2020; and (3) the collection of the note and interest on July 1, 2021.

Reference no: EM133056597

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