On October 1, 2021, Home Company issued to Security Bank c. Payment of the note payable on the date of maturity a P6,000,000, 8-month, noninterest-bearing note. The note payable was discounted by the bank at 12%. Required: 1. Prepare the appropriate journal entry by Home Company to record the issuance of the note. 2. Prepare the adjusting entry on December 31, 2021. 3. Present the note payable on December 31, 2021. 4. Prepare the journal entry to record the discount amortization and payment of the note payable on June 1, 2022, date of 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
On October 1, 2021, Home Company issued to Security Bank c. Payment of the note payable on the date of maturity a P6,000,000, 8-month, noninterest-bearing note. The note payable was discounted by the bank at 12%. Required: 1. Prepare the appropriate journal entry by Home Company to record the issuance of the note. 2. Prepare the adjusting entry on December 31, 2021. 3. Present the note payable on December 31, 2021. 4. Prepare the journal entry to record the discount amortization and payment of the note payable on June 1, 2022, date of 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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Problem 2(with solution)
Transcribed Image Text:Problem 8-2 (IAA)
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:
1. Prepare the appropriate journal entry by Home Company
to record the issuance of the note.
2. Prepare the adjusting entry on December 31, 2021.
3. Present the note payable on December 31, 2021.
4. Prepare the journal entry to record the discount
amortization and payment of the note payable on June 1,
2022, date of 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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