Skysong Corporation issued a 5-year, $73,000, zero-interest-bearing note to Brow
ID: 2408179 • Letter: S
Question
Skysong Corporation issued a 5-year, $73,000, zero-interest-bearing note to Brown Company on January 1, 2017, and received cash of $41,422. The implicit interest rate is 12%.
Prepare Skysong’s journal entries for (a) the January 1 issuance and (b) the December 31 recognition of interest. (Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
No.
Date
Account Titles and Explanation
Debit
Credit
January 1, 2017
December 31, 2017
No.
Date
Account Titles and Explanation
Debit
Credit
(a)January 1, 2017
(b)December 31, 2017
Explanation / Answer
Journal entry :
No Date account titles and explanation debit credit (a) January 1,2017 Cash 41422 Discount on notes payable 31578 Notes payable 73000 (To record note issue) (b) December 31,2017 Interest expense (41422*12%) 4971 Discount on notes payable 4971 (To recognition of interest)Related Questions
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