Prepare the journal entry for the issuance

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On November 1, 2011, Quantum Technology, a geothermal energy supplier, borrowed $16 million cash to fund a geological survey. The loan was made by Nevada BancCorp under a non committed short-term line of credit arrangement. Quantum issued a nine-month, 12% promissory note. Interest was payable at maturity. Quantum's fiscal period is the calendar year.

Required:

1. Prepare the journal entry for the issuance of the note by Quantum Technology.

2. Prepare the appropriate adjusting entry for the note by Quantum on December 31, 2011.

3. Prepare the journal entry for the payment of the note at maturity. 

Reference no: EM13995122

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