Entries for discounted note payable A business issued a 45-day note for $80,000 to a creditor on account. The note was discounted at 5%. Journalize the entries to record (a) the issuance of the note and (b) the payment of the note -at maturity. BuyFind Accounting 27th Edition WARREN + 5 others Publisher: Cengage Learning, ISBN: 9781337272094 BuyFind Accounting 27th Edition WARREN + 5 others Publisher: Cengage Learning, ISBN: 9781337272094 Solutions Chapter Section Chapter 11, Problem 11.6EX Textbook Problem Entries for discounted note payableA business issued a 45-day note for$80,000 to a creditor on account. The note was discounted at 5%. Journalize the entries to record (a) the issuance of the note and (b) the payment of the note -at maturity.

Expert Solution

A.

To determine

Note Payable: Note payable is an obligation of the business to pay to its creditors, in future for the benefits received that carry some interest.

To journalize: Issuance of the note.

Explanation of Solution

Working note:

Calculate the amount of interest expense.

Interest Expense = Note Payable×Interest (discounted) rate×Interest timeperiod                          = \$80,000×5%

Expert Solution

B.

To determine

To journalize: The payment of note at maturity.

Want to see the full answer?

Check out a sample textbook solution.See solution

Want to see this answer and more?

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

See solution