14.On August 31, 2014, Rognak Company discounted with recourse a customer's note at its bank at discount rate of 15%. The note was received from the customer on August 1, is for 90 days, has a face value of P9,000,000, and carries an interest rate of 12%. The discounting transaction is accounted for as secured borrowing. The customer paid the note to the bank on October 30, 2014, the date, of maturity. If the discounting is accounted for as a secured borrowing, what is the interest expense to be recognized on August 31, 2014? a. 90,000 b. 51,750 c. 231,750 d. 270,000 the entry on October 30,2914 will include: a. debit to notes receivable discounted 9,000,000 b. Debit to loans payable 9,038,250 c. Credit cash 9,000,000 d. Debit to loans payable 9,000,000
14.On August 31, 2014, Rognak Company discounted with recourse a customer's note at its bank at discount rate of 15%. The note was received from the customer on August 1, is for 90 days, has a face value of P9,000,000, and carries an interest rate of 12%. The discounting transaction is accounted for as secured borrowing. The customer paid the note to the bank on October 30, 2014, the date, of maturity. If the discounting is accounted for as a secured borrowing, what is the interest expense to be recognized on August 31, 2014? a. 90,000 b. 51,750 c. 231,750 d. 270,000 the entry on October 30,2914 will include: a. debit to notes receivable discounted 9,000,000 b. Debit to loans payable 9,038,250 c. Credit cash 9,000,000 d. Debit to loans payable 9,000,000
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter14: Long-term Liabilities: Bonds And Notes
Section: Chapter Questions
Problem 11E
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14.On August 31, 2014, Rognak Company discounted with recourse a customer's note at its bank at discount rate of 15%. The note was received from the customer on August 1, is for 90 days, has a face value of P9,000,000, and carries an interest rate of 12%.
The discounting transaction is accounted for as secured borrowing. The customer paid the note to the bank on October 30, 2014, the date, of maturity.
If the discounting is accounted for as a secured borrowing, what is the interest expense to be recognized on August 31, 2014?
a. 90,000
b. 51,750
c. 231,750
d. 270,000
the entry on October 30,2914 will include:
a. debit to notes receivable discounted 9,000,000
b. Debit to loans payable 9,038,250
c. Credit cash 9,000,000
d. Debit to loans payable 9,000,000
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