On December 1, 2016, Old Car Co. borrowed money at the bank by signing a 90-day non-interest-bearing note for $24,000 that was discounted at 8%. Which of the following entries is correct?December 31, 2016Interest Expense160   Discount on Notes Payable  160December 31, 2016Interest Expense160   Interest Payable  160March 1, 2017Note Payable23,520   Cash  23,520December 1, 2016Cash24,000   Note Payable  24,000

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Asked Dec 10, 2019
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On December 1, 2016, Old Car Co. borrowed money at the bank by signing a 90-day non-interest-bearing note for $24,000 that was discounted at 8%. Which of the following entries is correct?
  1. December 31, 2016
    Interest Expense
    160    
      Discount on Notes Payable     160
    December 31, 2016
    Interest Expense
    160    
      Interest Payable     160
    March 1, 2017
    Note Payable
    23,520    
      Cash     23,520
    December 1, 2016
    Cash
    24,000    
      Note Payable     24,000
 
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(Amount borrowed Interest expense 1 (for December) XRate of discount for 2016 3 (90 days) 3 (90 days) 12 06 3 100 360 = $24,000x = $480x 3 %3D = $160

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