On November 12, 2021, Jones Corporation borrows money at James National Bank by issuing a $10,000, 3 month, non-interest-bearing note. The note is discounted on a 12% basis. Calculate the effective annual interest rate.

On November 12, 2021, Jones Corporation borrows money at James National Bank by issuing a $10,000, 3 month, non-interest-bearing note. The note is discounted on a 12% basis. Calculate the effective annual interest rate.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Hook Inc. accepts on April 1, 2022 a 120-day 12% note for $8,000 worth of accounts receivable past due. Calculate the amount of cash Hook should collect on the note at maturity.
Analyze and review the following items and determine the appropriate journal entry. Bank Loan Interest on the bank loan is 2.50% annually. Interest has to be paid on January 7, 2021; for 2020. The entire amount of the loan ($4,000,000) was outstanding during the entire year. No payments were made during the year. Of the bank loan, $1,000,000 is due June 30, 2021 with the remainder due June 30, 2026. Notes Payable This is a short-term note. The company borrowed money from JRT Investments on October 31, 2020 for 3 months. The principal, along with interest is to be repaid on January 31, 2021. The interest rate is 1.8%.
Showtime, Inc. borrows $160,000 by issuing an 8%, 5-year note on January 1, 2020. Showcase must make payments of principal and interest every 3 months, beginning December 31, 2024. The note will be fully paid at maturity on Decembet 31, 2024. The company's fiscal year ends on December 31. Prepare the journal entries at January 1, 2020, and March 31, 2020. Prepare the Journal Entry on March 31, 2020 1/1/20 Cash 160,000 Long Term Note Payable 160,000 3/1/20 Interest Expense ?? Long Term Note Payable ?? Cash ??
On November 12, 2021, Jones Corporation borrows money at James National Bank by issuing a $10,000, 3 month, non-interest-bearing note. THe note is discounted on a 12% basis. Make a journal entry to record the issurance of the note.
On July 1, 2021, a company loans one of its employees $27,000 and accepts a eight-month, 8% note receivable. Calculate the amount of interest revenue the company will recognize in 2021 and 2022.
On Jan 1st, 2022, Saturn borrows $2,000,000 from Orange Bank and pledges $2,500,000 of its accounts receivables as collateral. Saturn pays a 1% finance fee for the borrowing and the interest is 8% on the note. Record the journal entry on Jan 1st, 2022.
Selkirk Company obtained a $16,000 note receivable from a customer on January 1, 2024. The note, along with interest at 12%, is due on July 1, 2024. On February 28, 2024, Selkirk discounted the note at Unionville Bank. The bank’s discount rate is 15%. Required: Prepare the journal entries required on February 28, 2024, to accrue interest and to record the discounting for Selkirk. Assume that the discounting is accounted for as a sale.
The following selected transactions relate to liabilities of United Insulation Corporation. United’s fiscal year ends on December 31. 2024 January 13 Negotiated a revolving credit agreement with Parish Bank that can be renewed annually upon bank approval. The amount available under the line of credit is $27.5 million at the bank’s prime rate. February 1 Arranged a three-month bank loan of $5.2 million with Parish Bank under the line of credit agreement. Interest at the prime rate of 7% was payable at maturity. May 1 Paid the 7% note at maturity. December 1 Supported by the credit line, issued $17.3 million of commercial paper on a nine-month note. Interest was discounted at issuance at a 6% discount rate. December 31 Recorded any necessary adjusting entry(s). 2025 September 1 Paid the commercial paper at maturity. Required: Prepare the appropriate journal entries through the maturity of each liability. Note: Do not round intermediate calculations. If no entry is…
am.111.
On June 30, 2020, GHI Company discounted at the bank a customer P6,000,000, 6-month, 10% note receivable dated April 30,2020. The bank discounted the note at 12%. What amount should be reported as net proceeds from the discounted note receivable?
On December 1, 2021, abc Ltd. borrowed $180,000 from a local bank by signing a four-month, 5% interest-bearing note. All payments will be made at the note's maturity date. Assuming Parfait has a December 31 year-end, the adjusting journal entry on December 31 will include a: debit to Interest payable of $750. credit to Notes Payable of $750 credit to Interest payable of $750 credit to Interest expense of $750
Kingbird County Bank agrees to lend the Ivanhoe Brick Company $492000 on January 1. Ivanhoe Brick signs a $492000, 6%, 9-month note. What entry will Ivanhoe Brick make to pay off the note and interest at maturity assuming that interest has been accrued to September 30?