1. On November 30, 2020, Cinnamon Inc. purchased $20,000 of machinery with a 6 month, 9%, note
payable. Principal and interest are due at the time the note matures on May 31, 2021. Assume
Cinnamon Inc. has a December 31 year-end.
a. What is the journal entry on November 30, 2020?
b. Assume adjusting entries are recorded at year-end. What is the adjusting journal entry on
December 31, 2020 to accrue for interest?
c. What is the journal entry on May 31, 2021 when the note matures?
2. Rhode & Partners purchased equipment, machinery, and land for $675,000. The market value of the
equipment is $250,000, the market value of the machinery is $340,000, and the market value of the
land is $410,000. What is the journal entry to record the basket purchase of assets?
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Exam #3 Additional Practice
