On December 31, 2022, Company sold land in exchange for a nine-month, 10% note. The note requires the payment of $200,000 plus interest on September 30, 2023. The company's fiscal year-end is December 31. The 10% rate properly reflects the time value of money for this type of note. On March 31, 2023, Company discounted the note at the Bank of the West (without recourse). The bank's discount rate is 12%. Prepare all required journal entries at March 31, 2023 to recognize interest revenue and the discounting of the note.
On December 31, 2022, Company sold land in exchange for a nine-month, 10% note. The note requires the payment of $200,000 plus interest on September 30, 2023. The company's fiscal year-end is December 31. The 10% rate properly reflects the time value of money for this type of note. On March 31, 2023, Company discounted the note at the Bank of the West (without recourse). The bank's discount rate is 12%. Prepare all required journal entries at March 31, 2023 to recognize interest revenue and the discounting of the note.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 12P: Hamlet Corporation purchases computer equipment at a price of 100,000 on January 1, 2019, paying...
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