On November 18, Year 1. Clear Glass Company borrowed $14,000 from First American Bank by issuing a 90-day, non-interest-bearing note. The bank discounted this note at 10% and remitted the difference to Clear Glass Required: 1. Prepare the journal entries of Clear Glass to record the preceding information, the related calendar year-end adjusting entry, and payment of the note at maturity 2. Show how the preceding items would be reported on the December 31, Year 1, balance shoot 3. Next Level What is Clear Glass Company's effective interest rate?
On November 18, Year 1. Clear Glass Company borrowed $14,000 from First American Bank by issuing a 90-day, non-interest-bearing note. The bank discounted this note at 10% and remitted the difference to Clear Glass Required: 1. Prepare the journal entries of Clear Glass to record the preceding information, the related calendar year-end adjusting entry, and payment of the note at maturity 2. Show how the preceding items would be reported on the December 31, Year 1, balance shoot 3. Next Level What is Clear Glass Company's effective interest rate?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Instructions
On November 18, Year 1, Clear Glass Company borrowed $14,000 from First American Bank by issuing a 90-day, non-interest-bearing note. The bank discounted this note at 10% and remitted the difference to Clear Glass.
General Journal
November-December, Year 1 entries should be recorded in page 1, February, Year 2 entries should be recorded in page 2
1
General Journal Instructions
2
3
4
Required:
1. Prepare the journal entries of Clear Glass to record the preceding information, the related calendar year end adjusting entry, and payment of
the note at maturity
2. Show how the preceding items would be reported on the December 31, Year 1, balance sheet.
3. Next Level What is Clear Glass Company's effective interest rate?
1
2
1. Prepare the necessary journal entries to record:
1. the issuance of the note on November 16, Year 1
2. the related adjustment on December 31, Year 1
3. payment of the nate on February 15, Year 2
4. interset expense for Year 2 on February 15, Year 2
3
DATE
DATE
GENERAL JOURNAL
ACCOUNT TITLE
GENERAL JOURNAL
ACCOUNT TITLE
POST, REE
POST. REF
CENT
DEBIT
PAGE 1
CREDIT
PAGE 2
CREDIT
Next Level
3. What is Clear Glass Company's effective interest rate?
Additional instructions
rate for 90 days
Balance Sheet
2. Show how the preceding items would be reported on the December 31, Year 1, balance sheet.
Balance Sheet Instructions
1 Current Liabilities:
2
3
CLEAR GLASS COMPANY
Partial Balance Sheet
December 31, Year 1
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