Iron's paper Company, whose fiscal year ends December 31, completed the following transactions involving notes payable:

Nov. 25 Purchased a new loading cart by issuing a 60day, 10% not for $43,200
Dec. 16 Borrowed $50,000 from the bank to finance inventory by signing a 90 day note. the face value of the note includes interest of $1,500. Proceeds received were $48,500.
Dec. 31 Made the end of the year adjusting entry to accrue interest expense.
Dec. 31 Made the end of the year adjusting entry to recognize the discount expired on the note.

Jan. 24 Paid off the loading cart note.
Mar. 16 Paid off the inventory note to the bank.

1. Prepare entries in journal form for the notes payable transactions.
2. In the transaction of December 16, would the bank be better of making the loan with interest stated separately instead of included in the $50,000? Why or why not?

To prepare entries in journal form for the notes payable transactions, we need to analyze each transaction and determine the accounts affected. Here's how we can do that:

1. Nov. 25 - Purchased a new loading cart by issuing a 60-day, 10% note for $43,200:
- Debit: Loading Cart (or Equipment) - $43,200
- Credit: Notes Payable - $43,200

2. Dec. 16 - Borrowed $50,000 from the bank to finance inventory by signing a 90-day note. The face value of the note includes interest of $1,500. Proceeds received were $48,500:
- Debit: Cash - $48,500
- Credit: Notes Payable - $50,000
- Credit: Interest Payable - $1,500 (to record the interest to be accrued)

3. Dec. 31 - Made the end of the year adjusting entry to accrue interest expense:
- Debit: Interest Expense - $1,500
- Credit: Interest Payable - $1,500

4. Dec. 31 - Made the end of the year adjusting entry to recognize the discount expired on the note:
- Debit: Interest Expense - $1,500
- Credit: Discount on Notes Payable - $1,500

5. Jan. 24 - Paid off the loading cart note:
- Debit: Notes Payable - $43,200
- Credit: Cash - $43,200

6. Mar. 16 - Paid off the inventory note to the bank:
- Debit: Notes Payable - $50,000
- Credit: Cash - $50,000

Now, let's move on to the next question:

2. In the transaction of December 16, would the bank be better off making the loan with interest stated separately instead of included in the $50,000? Why or why not?

In this transaction, the bank offered a loan of $50,000 with an interest of $1,500 included in the face value. Whether it is better for the bank to state the interest separately depends on various factors such as the bank's interest rate policy, their risk assessment, and competition in the market.

Advantages of including interest in the face value:
- Simplified accounting for the borrower (Iron's Paper Company) as they only make this single lump-sum payment.
- Possible higher perceived value for the borrower, as they are not required to pay the interest separately.

Advantages of stating interest separately:
- Transparency for the borrower, as they can clearly see the cost of borrowing.
- Easier calculation for future interest payments, as the principal amount is known separately from the interest.

Ultimately, it depends on the specific circumstances and negotiations between the bank and the borrower.