Question 2 (of 5) value 20.00 points Brief Exercise 13-2 Non-interestbearing not

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Question 2 (of 5) value 20.00 points Brief Exercise 13-2 Non-interestbearing note; accrued interest LO13-2] On October 1, Eder Fabrication borrowed $76 million and issued a nine-month promissory note. Interest was discounted at issuance at a 12% discount rate Prepare the journal entry for the issuance of the note and the appropriate adjusting entry for the note at December 31, the end of the reporting period (If no entry is required for a transactionlevent, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) View transaction list Journal entry worksheet Record the issuance of the note. Note: Enter debits before credits. Event General Journal DebitCredit tation: 5 assword: lab-104

Explanation / Answer

Date Accounting title & explantions debit credit 1-Oct cash 69160000 discount on notes payble(76*12%*9/12) 6840000 notes payable 76000000 31-Dec interest expense 2280000 discount on notes payable (76m*12%*3/12) 2280000 At maturity notes payable 76000000 interest expense (76m*12%*6/12) 4560000 cash 76000000 Discount on notes payable (76m*12%*6/12) 4560000

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