This problem continues the Draper Consulting situation from Problem 9-40

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P10-24 Accounting for liabilities of a known amount [15–20 min]

This problem continues the Draper Consulting situation from Problem 9-40 of
Chapter 9. Refer to Problem 2-62 of Chapter 2. Draper Consulting believes the company
will need to borrow $300,000 in order to expand operations. Draper consults the
bank and secures a 10%, five-year note on March 1, 2013. Draper must pay the bank
principal in 5 equal installments plus interest annually on March 1.

Requirements

1. Record the $300,000 note payable on March 1, 2013.

2. Record the entry to accrue interest due on the note at December 31, 2013.

3. Record the entry Draper would make to record the payment to the bank on
March 1, 2014.