On November 1, Bob's Skateboards signed a $12,000, 90-day, 5% note payable to cover a past due account payable.

On November 1, Bob's Skateboards signed a $12,000, 90-day, 5% note payable to cover a past due account payable.

Required:

a.  What amount of interest expense on this note should Bob's Skateboards report on year-end December 31?

b.  Prepare Bob's journal entry to record the issuance of the note payable.

c.  Prepare Bob's journal entry to record the payment of the note on February 1 of the following year.