rief Exercise 147 On August 31, Latty Co. partially refunded $406,000 of its out
ID: 2632127 • Letter: R
Question
rief Exercise 147
On August 31, Latty Co. partially refunded $406,000 of its outstanding 10% note payable made one year ago to Dugan State Bank by paying $406,000 plus $40,600 interest, having obtained the $446,600 by using $122,640 cash and signing a new one-year $356,000 note discounted at 9% by the bank.
Account Titles and Explanation
Debit
Credit
Account Titles and Explanation
Debit
Credit
rief Exercise 147
On August 31, Latty Co. partially refunded $406,000 of its outstanding 10% note payable made one year ago to Dugan State Bank by paying $406,000 plus $40,600 interest, having obtained the $446,600 by using $122,640 cash and signing a new one-year $356,000 note discounted at 9% by the bank.
rief Exercise 147 On August 31, Latty Co. partially refunded $406,000 of its outstanding 10% note payable made one year ago to Dugan State Bank by paying $406,000 plus $40,600 interest, having obtained the $446,600 by using $122,640 cash and signing a new one-year $356,000 note discounted at 9% by the bank. Prepare the adjusting entry at December 31, assuming straight-line amortization of the discount. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit December 31 Make the entry to record the partial refunding. Assume Latty Co. makes reversing entries when appropriate. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit August 31Explanation / Answer
(1) Notes Payable............................................................................. 406,000
Interest Expense......................................................................... 40,600
Discount on Notes Payable (9%
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