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Question 2 Not complete Recording Debt Issued at a Discount Marked out of 2.00 The face value of a company's commercial paper borrowings (loan) at December 31 was $6,000,000. This six-month loan originated on September 1. a. Prepare the journal entry for issuance of the loan on September 1, assuming that the loan is discounted at 5.7%. Hint: Discount on Note Payable is equal to 6 months of interest. Date a. Sept. 1 b. Prepare the adjusting entry at December 31. Amortize the discount on the note using the straight-line method. c. Prepare the entry to repay the loan on February 28 of the following year. d. Calculate the market rate of the loan. b. Dec. 31 c. Feb. 28 Account Name To record issuance of the loan. To record adjusting entry at year-end. To record repayment of the loan. Flag question d. Market rate of the loan 0 % Dr. 0 0 0 0 0 OOOO 0 0 0 0 Cr. 0 OOO 0 0 0 0 OOOO Note: Round percentage to two decimal places (for example, enter 2.05 for 2.04555%). 10 0

Recording Debt Issued at a Discount The face value of a companys commercial paper borrowings (loan) at December 31 was 56,000,000. This six-month loan originated on September 1. a. Prepare the journal entry for issuance of the loan on September 1. assuming that the loan is discounted at 5.7\%. Hint: Oiscount on Note Payable is equal to 6 months of interest. b. Prepare the adjusting entry at December 31 . Amortize the discount on the note using the straight-line method. c. Prepare the entry to repay the loan on February 28 of the following year. d. Calculate the market rate of the loan. Note: Round percentage to two decimal places (for example, enter 2.05 for 2.04555% ): d. Market rate of the loan

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