On December 31, 2022, Company sold land in exchange for a nine-month, 10% note. The note requires the payment of $200,000 plus interest on September 30, 2023. The company's fiscal year-end is December 31. The 10% rate properly reflects the time value of money for this type of note. On March 31, 2023, Company discounted the note at the Bank of the West (without recourse). The bank's discount rate is 12%. Prepare all required journal entries at March 31, 2023 to recognize interest revenue and the discounting of the note.

On December 31, 2022, Company sold land in exchange for a nine-month, 10% note. The note requires the payment of $200,000 plus interest on September 30, 2023. The company's fiscal year-end is December 31. The 10% rate properly reflects the time value of money for this type of note. On March 31, 2023, Company discounted the note at the Bank of the West (without recourse). The bank's discount rate is 12%. Prepare all required journal entries at March 31, 2023 to recognize interest revenue and the discounting of the note.

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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