1. CJ, Inc. issued a promissory note to AJ, Inc. in the amount of $400,000 on January 1, 2014, the due date is December 31, 2018. The note has a stated rate of 4%. Interest is due each year on December 31. The current

1. CJ, Inc. issued a promissory note to AJ, Inc. in the amount of $400,000 on January 1, 2014, the due date is December 31, 2018. The note has a stated rate of 4%. Interest is due each year on December 31. The current

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

1. CJ, Inc. issued a promissory note to AJ,
Inc. in the amount of $400,000 on January 1,
2014, the due date is December 31, 2018.
The note has a stated rate of 4%. Interest is
due each year on December 31. The current
yield rate of interest is 8%.
a) What is the present value of the note.
b) What entry would AJ, Inc. journalize for
the issuance of the note?
|

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