On May 2, McLain Company lends $9,000 to Chang, Inc., issuing a 6-month, 9% not. at the maturity date, November 2, Chang indicates that it cannot pay.

Instructions

Prepare the entry to record the issuance of the note.
Prepare the entry to record the dishonor of the note, assuming that McLain Company expects collection will occur.
Prepare the entry to record the dishonor of the note, assuming that McLain Company does not expect collection in the future.

Solution

McLain Company
Journal Entries

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