Blanton Plastics, a household plastic product manufacturer, borrowed $24 million cash on October 1, 2024, to provide working capital for year-end production. Blanton issued a four-month noninterest-bearing promissory note. 15% is the bank's stated discount rate Required: (a) Prepare the journal entries to record the issuance of the noninterest-bearing note by Blanton Plastics on October 1, 2024, the adjusting entry at December 31, and payment of the note at maturity. (b) What would be the effective interest rate?
Blanton Plastics, a household plastic product manufacturer, borrowed $24 million cash on October 1, 2024, to provide working capital for year-end production. Blanton issued a four-month noninterest-bearing promissory note. 15% is the bank's stated discount rate Required: (a) Prepare the journal entries to record the issuance of the noninterest-bearing note by Blanton Plastics on October 1, 2024, the adjusting entry at December 31, and payment of the note at maturity. (b) What would be the effective interest rate?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Sh15
Transcribed Image Text:Blanton Plastics, a household plastic product manufacturer, borrowed $24 million cash on October 1, 2024, to provide working capital
for year-end production. Blanton issued a four-month noninterest-bearing promissory note. 15% is the bank's stated discount rate
Required:
(a) Prepare the journal entries to record the issuance of the noninterest-bearing note by Blanton Plastics on October 1, 2024, the
adjusting entry at December 31, and payment of the note at maturity. (b) What would be the effective interest rate?
Complete this question by entering your answers in the tabs below.
Req A
Suppose the face amount of the note was adjusted to include interest (a noninterest-bearing note) and 15% is the bank's stated
discount rate. (a) Prepare the journal entries to record the issuance of the noninterest-bearing note by Blanton Plastics on October 1,
2024, the adjusting entry at December 31, and payment of the note at maturity.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers
in whole dollars.
/
View transaction list
No
1
Req B
2
3
Date
October 01,
2024
View journal entry worksheet
December 31,
2024
January 31,
2025
Cash
Notes payable
General Journal
No Transaction Recorded
No Transaction Recorded
< Req A
Req B >
Debit
Credit
Show less A
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education