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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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Chapter
Section
BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

Prepare general journal entries for the following transactions:

  1. (a) Issued a $2,500, 30-day, 6% note in payment of an account payable.
  2. (b) Borrowed $3,000 cash from the bank, giving a 60-day, non-interest-bearing note discounted at 7% by the bank.
  3. (c) Paid the note in transaction (b) in full at maturity.

(a)

To determine

Prepare journal entry to record issued a $2,500, 30 day, 6% note in payment of an account payable.

Explanation

Notes payable: Notes Payable is a written promise to pay a certain amount on a future date, with the certain percentage of interest. Companies use to issue notes payable to meet short-term financing needs.

Prepare journal entry to record issued a $2,500, 30 day, 6% note in payment of an account payable.

DateAccount titles and ExplanationDebitCredit
 Accounts payable�...

(b)

To determine

Prepare journal entry to record borrowed $3,000 cash from the bank, giving a 60-day, non-interest- bearing note discounted at 7% by the bank.

(c)

To determine

Prepare journal entry to record paid note at maturity.

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