On January 1, 2022, Slack Company finished legal services and accepted in exchange a 5% $400,000 promissory note with a due date of December 31, 2024. Interest is receivable on January 1 of each year. Notes with similar risk have a market rate of interest of 10%. (c) Prepare a Schedule of Note Discount/Premium Amortization for Slack Company under the effective interest method. (d) Prepare the journal entries on the following dates: Jan 1, 2022 and Dec 31 2022
On January 1, 2022, Slack Company finished legal services and accepted in exchange a 5% $400,000 promissory note with a due date of December 31, 2024. Interest is receivable on January 1 of each year. Notes with similar risk have a market rate of interest of 10%. (c) Prepare a Schedule of Note Discount/Premium Amortization for Slack Company under the effective interest method. (d) Prepare the journal entries on the following dates: Jan 1, 2022 and Dec 31 2022
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
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 1RE
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On January 1, 2022, Slack Company finished legal services and accepted in exchange a 5% $400,000 promissory note with a due date of December 31, 2024. Interest is receivable on January 1 of each year. Notes with similar risk have a market rate of interest of 10%.
(c) Prepare a Schedule of Note Discount/Premium Amortization for Slack Company under the effective interest method.
(d) Prepare the
Jan 1, 2022 and Dec 31 2022
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