Entries for Discounted Note Payable A business issued a 60-day note for $75,000

Question

Entries for Discounted Note Payable A business issued a 60-day note for $75,000 to a creditor on account. The note was discounted at 7%. Assume a 360-day year a. Journalize the entry to record the issuance of the note. For a compound transaction, if an amount box does not require an entry, leave it blank. a. Check My Work Why is the company issuing the note? What type of note is being issued (interest-bearing or discounted)? How much will the company owe on the maturity date? Learning Objective 1 b. Journalize the entry to record the payment of the note at maturity Cash b.

Explanation / Answer

=75000*7%*60/360

=875

a Accounts payable 75000 Notes payable 75000 b Notes payable 75000 Interest expense 875 Cash 75875

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