ABC company issued a promissory note to DEF bank. Details from the promissory note as follows: Date of note: November 15,2020 Term of note: 6 months Principal: $120,000 Interest rate: 12% Interest was not discounted on the date of note issuance Questions: 1) What is the type of adjustment? 2) Adjusting entry on December 31 3) Should the adjustment was not made, what would be the effect on net income?
ABC company issued a promissory note to DEF bank. Details from the promissory note as follows: Date of note: November 15,2020 Term of note: 6 months Principal: $120,000 Interest rate: 12% Interest was not discounted on the date of note issuance Questions: 1) What is the type of adjustment? 2) Adjusting entry on December 31 3) Should the adjustment was not made, what would be the effect on net income?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
ABC company issued a promissory note to DEF bank. Details from the promissory note as follows:
Date of note: November 15,2020
Term of note: 6 months
Principal: $120,000
Interest rate: 12%
Interest was not discounted on the date of note issuance
Questions:
1) What is the type of adjustment?
2)
3) Should the adjustment was not made, what would be the effect on net income?
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