A company accepted a trade note from AB Enterprises, face value $3,000, 15 percent interest-bearing,...
90.2K
Verified Solution
Link Copied!
Question
Accounting
A company accepted a trade note from AB Enterprises, face value $3,000, 15 percent interest-bearing, dated August 18, maturing in 180 days. Assume 360 days in a year. Required: Sixty days prior to the maturity of the note, the company endorsed the note with recourse (discounted) to XY Finance Company at a 9 percent annual rate. Compute the following: (a) The company's proceeds from the note $_________________. Computations: (b) The company's interest earned (net of discount) $___________. Computations: (c) Give the journal entry for the company to record the discounting transaction, assuming that the end of their fiscal year is June 30. The discount is to be recorded as a sale. Assume interest revenue was not recorded before the discounting.
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
