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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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January 1, 2019, Johnson Corporation issued a 2-year note due December 31, 2017, with a face value of $10,000, receiving $7,694.68 in exchange.

Required:

Prepare the journal entries to account for the note:

  1. 1. on the date the note is issued
  2. 2. at the end of 2019
  3. 3. at the end of 2020

1.

To determine

Prepare journal entry to record account for the note on the date of issued.

Explanation

Notes payable:

Notes payable is a written promise to make payment for specific sum at a certain future date that includes component of interest.

Prepare journal entry to record issuance of note payable on the date of issued.

DateAccount Titles and ExplanationDebitCredit
January 1, 2019Cash$7,694.68  
 Discount on notes payable (balancing figure)$2,305.32  
      Notes payable $10,000...

2.

To determine

Prepare journal entry to record account for the note at the end of 2019.

3.

To determine

Prepare journal entry to record account for the note at the end of 2020.

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