# Use information from EB9. Compute the interest expense due when Airplanes Unlimited honors the note. Show the journal entry to recognize payment of the short-term note on October 18.

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### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685

#### Solutions

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FindFindarrow_forward

### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685
Chapter 12, Problem 10EB
Textbook Problem
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## Use information from EB9. Compute the interest expense due when Airplanes Unlimited honors the note. Show the journal entry to recognize payment of the short-term note on October 18.

To determine

Concept introduction:

Purchase terms may contain the cash discount for early payment of the credit purchase. For example, a term 2/10, n 30 means there shall be a 2% discount allowed if the payment is made within 10 days and the total credit period allowed is 30 days.

To indicate:

The interest expense and journal entry for the payment of the short term.

### Explanation of Solution

The journal entries for the given transaction are explained is as follows:

 Journal entries S.No. Date Account Title Debit Credit A Mar. 19 Purchases \$ 60,000 Accounts Payable \$ 60,000 (Being purchase made on account) (4800 units @ \$12.50) B Mar. 30 Accounts Payable \$ 20,000 Cash \$ 20,000 (Being partial payment made to supplier after discount period) (60000/3) C Apr...

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