Entries for Discounting Notes Payable Ramsey Company issues an $564,000, 30-day
ID: 2584607 • Letter: E
Question
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 Ramsey’s entries to record:
the issuance of the note.
the payment of the note at maturity.
b. Journalize Buckner’s entries to record:
the receipt of the note.
the receipt of the payment of the note at maturity.
1. 2.Explanation / Answer
a. Journalize Ramsey’s entries to record:
the issuance of the note.
the payment of the note at maturity.
b. Journalize Buckner’s entries to record:
the receipt of the note.
the receipt of the payment of the note at maturity.
Date accounts & explanation debit credit Inventory a/c 564000 Notes payable a/c 564000 (TO record issuance of notes payable) Notes payable a/c 564000 Interest expenses a/c (564000*7%*30/360) 3290 Cash a/c 567290 (To record maturity of notes )Related Questions
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