On May 1, 2022, FDN Trading accepted a 120-day, 8% P60,000 note from ABC Co. 30 days after, FDN discounted with recourse the note to a bank that offers a 11% discount rate. FDN assumes the interest expense associated with this transaction. How much interest expense should FDN Trading debit on its records? Calculate the interest expense and not the net interest expense.
On May 1, 2022, FDN Trading accepted a 120-day, 8% P60,000 note from ABC Co. 30 days after, FDN discounted with recourse the note to a bank that offers a 11% discount rate. FDN assumes the interest expense associated with this transaction. How much interest expense should FDN Trading debit on its records? Calculate the interest expense and not the net interest expense.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On May 1, 2022, FDN Trading accepted a 120-day, 8% P60,000 note from ABC Co. 30 days
after, FDN discounted with recourse the note to a bank that offers a 11% discount rate. FDN
assumes the interest expense associated with this transaction. How much interest expense
should FDN Trading debit on its records? Calculate the interest expense and not the net interest
expense.
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