On May 10, 20X1, Washington Company received a 90-day, 8 percent, $8,400 interest-bearing note from Whitehead Company in settlement of Whitehead's past-due account. On June 30, Washington discounted this note at City Bank and Trust. The bank charged a discount rate of 13 percent. On August 8, Washington received a notice that Whitehead had paid the note and the interest on the due date. Required: Prepare the entries in general journal form to record these transactions. Analyze: If the company prepared a balance sheet on July 31, 20X1, how should Notes Receivable-Discounted be presented on the statement?

On May 10, 20X1, Washington Company received a 90-day, 8 percent, $8,400 interest-bearing note from Whitehead Company in settlement of Whitehead's past-due account. On June 30, Washington discounted this note at City Bank and Trust. The bank charged a discount rate of 13 percent. On August 8, Washington received a notice that Whitehead had paid the note and the interest on the due date. Required: Prepare the entries in general journal form to record these transactions. Analyze: If the company prepared a balance sheet on July 31, 20X1, how should Notes Receivable-Discounted be presented on the statement?

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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