On November 1. 2013. Ziegler Products issued a $200,000. 9-month, noninterest-be

Question

On November 1. 2013. Ziegler Products issued a $200,000. 9-month, noninterest-bearing note to the bank. Interest was discounted at a 12% discount rate. Required: Prepare the appropriate journal entry by Ziegler to record the issuance of the note. Prepare the adjusting entry on December 31, 2013. Prepare the appropriate journal entry on August I. 2013 (maturity). Suppose the note had been structured as a 12% note with interest and principal payable at maturity. Prepare the appropriate journal entry to record the issuance of the note by Ziegler. Prepare the appropriate journal entry on December 31,2013, to accrue interest expense on the note described in number 4 for the 2013 financial statements.

Explanation / Answer

ACCOUNT DEBIT CREDIT NOV 1 CASH 182000 Discount on Notes Payable ($200,000 X 12% X 9/12) 18000 NOTES PAYBLE 200000 2 )DEC 31 Interest Expense ($18,000 X 2/9) 4000 DISCOUNT ON NOTE PAYBLE 4000 3 )NOV 1 CASH 200000 NOTE PAYBLE 200000 4 ) Interest Expense ($200,000 X 12% X 2/12) 4000 INTREST PAYBLE 4000

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.