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Entries for Discounting Notes Payable
Ramsey Company issues an $564,000, 30-day note to Buckner Company for merchandise inventory. Buckner discounts the note at 7%.
Assume a 360-day year. For a compound transaction, if an amount box does not require an entry, leave it blank.
a. Journalize Ramseys entries to record:
the issuance of the note.
the payment of the note at maturity.
b. Journalize Buckners entries to record:
the receipt of the note.
the receipt of the payment of the note at maturity.
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