Answer:
1.
February 1 Cash $330000 Dr
Notes Payable $330000 Cr
2.
July 31 Interest expense $16500 Dr
Interest payable $16500 Cr
Aug 1 Notes Payable $330000 Dr
Interest Payable $16500 Dr
Cash $346500 Cr
Explanation:
1.
The issuance of note payable against cash will require the cash account to be debited and notes payable, which is a liability, to be credited.
2.
The interest on note payable for 6 months will become due and will be recorded on 31 July. The interest expense and interest payable accounts will be used.
The interest for 6 months is = 330000 * 0.1 * 6/12 = $16500
On 1 August, when the note and interest payable is paid, the cash will be credited by the sum of notes payable and interest payable accounts.
