On April 1, 2023, DMH Inc. signed a $111,000, zero-interest-bearing, six-month promissory note. The note's present value is $105,714 based on the bank's discount rate of 10%. The company's year-end is September 30, 2023 and the note is repayable on October 1, 2023.
On April 1, 2023, DMH Inc. signed a $111,000, zero-interest-bearing, six-month promissory note. The note's present value is $105,714 based on the bank's discount rate of 10%. The company's year-end is September 30, 2023 and the note is repayable on October 1, 2023.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
On April 1, 2023, DMH Inc, signed a $111,000, zero-interest-bearing, six-month promissory note. The note's present value is $105,714 based on the bank's discount rate of 10%. The company's year-end is September 30,2023 and the note is repayable on October 1, 2023. (a). Prepare the
Transcribed Image Text:On April 1, 2023, DMH Inc. signed a $111,000, zero-interest-bearing, six-month promissory note. The note's present value is
$105,714 based on the bank's discount rate of 10%. The company's year-end is September 30, 2023 and the note is repayable on
October 1, 2023.
(a)
Transcribed Image Text:Prepare the journal entry on the books of DMH Inc. to record the year-end interest accrual. (Round answers to 0 decimal
places, e.g. 5,125. Credit account titles are automatically indented when the amount is entered. Do not indent
manually. List debit entry before credit entry. If no entry is required, select "No Entry" for the account titles and
enter 0 for the amounts.)
te
Your answer is partially correct.
nber
30
Account Titles and Explanation
Interest Expense
Notes Payable
Debit
2643
Credit
4405
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.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