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On October 1, 2021, Home Company issued to Security Bank a P6,000,000, 8-month, noninterest-bearing note. The note payable was discounted by the bank at 12%.

On October 1, 2021, Home Company issued to Security Bank a P6,000,000, 8-month, noninterest-bearing note. The note payable was discounted by the bank at 12%.

FINANCIAL ACCOUNTING
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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Answer number 5 only (with solution/explanation)

Problem 8-2 (IA. c. Payment of the note payable on the date of maturity HA) On October 1, 2021, Home Company issued to Security Bank a P6,000,000, 8-month, noninterest-bearing note. The note payable was discounted by the bank at 12%. Required: any to am tion -- Hote payable on maturity. 5. Prepare the journal entry to record the following assuming the note had been structured as a 12% note with interest and principal payable at maturity: a. Issuance of the note payable on October 1, 2021 b. Accrued interest payable on December 31, 2021 c. Payment of the note payable on the date of maturity
Transcribed Image Text:Problem 8-2 (IA. c. Payment of the note payable on the date of maturity HA) On October 1, 2021, Home Company issued to Security Bank a P6,000,000, 8-month, noninterest-bearing note. The note payable was discounted by the bank at 12%. Required: any to am tion -- Hote payable on maturity. 5. Prepare the journal entry to record the following assuming the note had been structured as a 12% note with interest and principal payable at maturity: a. Issuance of the note payable on October 1, 2021 b. Accrued interest payable on December 31, 2021 c. Payment of the note payable on the date of maturity
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