**Journal Entry Exercise: Discounted and Interest-Bearing Notes****Scenario:**On October 1, Ramos Co. signed a $90,000, 60-day discounted note at the bank. The discount rate was 6%, and the note was paid on November 30. Assume a 360-day year is used for interest calculations.**Tasks:****a. Journalize the entries for October 1 and November 30 for the discounted note.**- Note: If an amount box does not require an entry, leave it blank. Round answers to the nearest dollar.- **October 1** - [Dropdown for account selection] [Amount box] - [Dropdown for account selection] [Amount box]- **November 30** - [Dropdown for account selection] [Amount box] - [Dropdown for account selection] [Amount box]**b. Assume instead that Ramos Co. signed a 6% interest-bearing note. Journalize the entries for October 1 and November 30 assuming the note was not discounted.**- Note: If an amount box does not require an entry, leave it blank.- **October 1** - [Dropdown for account selection] [Amount box] - [Dropdown for account selection] [Amount box]- **November 30** - [Dropdown for account selection] [Amount box] - [Dropdown for account selection] [Amount box]**Explanation:**This exercise provides practice in journalizing transactions involving both discounted and interest-bearing notes. Participants must select the correct accounts and calculate the appropriate amounts to record each transaction effectively. Use the given interest rate and note amount to determine the entries.

Discount on notes payable = Amount of note payable x discount rate = $90000 x 6% = $5400

On October 1, Ramos Co. signed a $90,000, 60-day discounted note at the bank. The discount rate was 6%, and the note was paid on November 30. (Assume a 360-day year is used for interest calculations.) a. Journalize the entries for October 1 and November 30. If an amount box does not require an entry, leave it blank. When required, round your answers to the nearest dollar. Oct. 1 Nov. 30 b. Assume that Ramos Co. signed a 6% interest-bearıng note. Journalize the entries for October 1 and November 30 assuming the note was not discounted. If an amount box does not require an entry, leave it blank. Oct. 1 Nov. 30

On October 1, Ramos Co. signed a $90,000, 60-day discounted note at the bank. The discount rate was 6%, and the note was paid on November 30. (Assume a 360-day year is used for interest calculations.) a. Journalize the entries for October 1 and November 30. If an amount box does not require an entry, leave it blank. When required, round your answers to the nearest dollar. Oct. 1 Nov. 30 b. Assume that Ramos Co. signed a 6% interest-bearıng note. Journalize the entries for October 1 and November 30 assuming the note was not discounted. If an amount box does not require an entry, leave it blank. Oct. 1 Nov. 30

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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