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n April 12, Hong Company agrees to accept a 60-day, 8%, $7,800 note from Indigo Company to extend the due date o

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

On April 12, Hong Company agrees to accept a 60-day, 8%, $7,800 note from Indigo Company to extend the due date on an overdue account. What is the journal entry that Indigo Company would make when it records payment of the note on the maturity date? (Use 360 days a year.)

Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

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