On May 1, 2014, Kristoffer Company sold merchandise to Customer Gwen for P40,000, credit terms 2/10, n/EOM. At the en
On May 1, 2014, Kristoffer Company sold merchandise to Customer Gwen for P40,000, credit terms 2/10, n/EOM. At the end of May, Customer Gwen could not make payment. Instead, a six-month, 12 percent note receivable of P40,000 was received by Kristoffer (dated June 1, 2014). Kristoffer Company's accounting period ends December 31. On August 1, 2014, Kristoffer discounted (i.e. sold) this note, with recourse, to Metropolis Bank at 14 percent interest. On the maturity date, Gwen paid the bank in full for the note.
a. What is the
b. What is the journal entry to record the note received?
c. What is the journal entry to record the interest earned for June and July?
d. What is the journal entry to record the discounting?
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