Interest-bearing note transactions On November 7, 2018, Mura Company borrows $140,000 cash by signing a 90-day, 10% note payable with a face value of $140,000.

1. Compute the accrued interest payable on December 31, 2018.

Principal xRate (%) xTime =Interest
Total Through Maturity 160,000 8 90/360 3,200
Year end interest accrual 160,000 8 54/360 1,920
Interest Recognized Feb. 5 160,000 8 4/360 1,280

Prepare the journal entry to record the accrued interest expense at December 31, 2017 and payment of the note at maturity
Record the accrued interest expense.

2. Dec. 31, 2017
3. Feb 05, 2018