Bencorp issues a $90,000, 6-month, noninterest-bearing note that the bank discounted at a 10%discount rate.Required:1. Prepare the appropriate journal entry to record the issuance of the note.2. Determine the effective interest rate.Complete this question by entering your answers in the tabs below.Required 1Required 2Determine the effective interest rate. (Round your answer to 2 decimal places.)Effective interest rate10.00 %< Required 1Required 2 Bencorp issues a $90,000, 6-month, noninterest-bearing note that the bank discounted at a 10%discount rate.Required:1. Prepare the appropriate journal entry to record the issuance of the note.2. Determine the effective interest rate.Complete this question by entering your answers in the tabs below.Required 1Required 2Prepare the appropriate journal entry to record the issuance of the note. (If no entry is required for a trjournal entry required" in the first account field.)View transaction listJournal entry worksheet1Record the issuance of $90,000, 6-month, non-interest-bearing note issued ata 10% discount rate.Note: Enter debits before credits.

The procedure of entering commercial transactions for the first time in the books of accounts is…

orp issues a $90,000, 6-month, noninterest-bearing note that the bank discounte unt rate. red: pare the appropriate journal entry to record the issuance of the note. ermine the effective interest rate. mplete this question by entering your answers in the tabs below.

orp issues a $90,000, 6-month, noninterest-bearing note that the bank discounte unt rate. red: pare the appropriate journal entry to record the issuance of the note. ermine the effective interest rate. mplete this question by entering your answers in the tabs below.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: A business issued a 30-day note for $57,000 to a bank. The note was discounted at 7%. Assume a 360…

A: The objective of this question is to understand how to journalize the issuance and payment of a…

Q: Sylvestor Systems borrows $50,000 cash on May 15 by signing a 60-day, 5%, $50,000 note. 1. On what…

A: The note payable is the liability for the business which is to be paid on due date with interest.

Q: Complete the following table for the simple discount notes. Use the ordinary interest method. (Round…

A: Maturity Value (MV) = $6000 Discount Rate ( r ) = 3.5% Time (n) = 160 days = 160/12 =…

Q: On April 26, two notes are discounted at the same rate t .The face of the first note is $7370 with a…

A: A note is a financial instrument that promises to pay a certain sum of money to the holder at the…

Q: McKoel Corporation has a three-month, $20,000, 3% note receivable from L. Noel that was signed on…

A: Journal: Recording of a business transactions in a chronological order.

Q: Cullumber Inc. assigns $4728000 of its accounts receivables as collateral for a $3.30 million loan…

A: Journal Entry: Journal entry is the act of keeping records of transactions in an accounting journal.…

Q: The following interest-bearing promissory note was discounted at a bank by the payee before…

A: The proceeds are the net amount owing by the borrower to the lender after deducting the permitted…

Q: Sylvestor Systems borrows $103,000 cash on May 15 by signing a 150-day, 4%, $103,000 note. 1. On…

A: The journal entries are prepared to record the transactions on regular basis. The adjustment entries…

Q: Sylvestor Systems borrows $185,000 cash on May 15 by signing a 150-day, 7%, $185,000 note. 1. On…

A: Journal: Recording of a business transactions in a chronological order.

Q: ired 2B rest at turity ure? Required 2B General Journal

A: Answer : Note mature date = 12 October 15 May + 150 days = 12 Oct. 16 Days remaining from May + 30…

Q: A borrower has two alternatives for a loan: (1) issue a $360,000, 75-day, 6% note or (2) issue a…

A: Notes payable is a promise to pay certain amount by the buyer to the seller on a date and interest…

Q: . Journalize all entries for Symphony Bank related to the note for 2018 and 2019.

Q: Sylvestor Systems borrows $98,000 cash on May 15 by signing a 30-day, 7%, $98,000 note. 1. On what…

A: Notes Payable an instrument issued by the borrower to the lender. This act as a promissory note…

Q: The credit card with the transaction described in the popup below uses the average daily balance…

A: Given, Monthly interest rate is 1.5% previous balance is $2,653.43

Q: Sunland Resort Corp. issued a 20-year, 6%, $274,000 mortgage note payable to finance the…

A: Journal entries shows the recording of transactions during an accounting year and every transaction…

Q: Issued, on January 01, 2010, a four-year note to ABC Bank. Face value of note is $40,000. It is a 5%…

A: A Note payable is a benefit to both the borrower and the lender, as long as both parties understand…

Q: Quick Tire and Lube received a 120-day, 9% note for $60,000, dated June 12, from a customer on…

A: Maturity value of the note=Face value of note+Interest revenue

Q: What journal entry should be made to reflect the issuance of a $3,000 note to a creditor who has…

A: The issue is a journal entry that records the issuing of a $3,000 note to a customer. creditor who…

Q: Tamarisk, Inc. receives a $10500, 3-month, 8% promissory note from Nash's Trading Post, LLC in…

A: Note receivables means the instrument in which the outsider agree to pay certain sum with or without…

Q: E10.1 (LO 1), AP C.S. Lewis Company had the following transactions involving notes payable. July 1,…

A: Note payable: Note payable also called promissory note. It is a legal instrument in which one party…

Q: Sylvestor Systems borrows $183,000 cash on May 15 by signing a 90-day, 6%, $183,000 note. 1. On what…

A: Notes payable are issued to raise the long-term or short-term funds. If the notes payable are to be…

Q: The following interest-bearing promissory note was discounted at a bank by the payee before…

A: A promissory note owned by an individual can be discounted by a bank at a pre-specified rate of…

Q: Arvan Patel is a customer of Bank’s Hardware Store. For Mr. Patel’s latest purchase on January 1,…

A: Total interest on Note = face value of note x rate of interest x no. of years = $459,505 x 14% x 2…

Q: Maturity Value (in $) Date of Maturity Face Value Term of Note (days) Interest Rate (%) Note Date…

A: Given: Face value = $1280 Days of note = 130 Interest rate = 7.9%

Q: Sylvestor Systems borrows $50,000 cash on May 15 by signing a 90-day, 8%, $50,000 note. 1. On what…

A: The note payable is treated as liability in the business. The note that matures in less than one…

Q: What journal entry should be made to reflect the issuance of a $30,000 note to a creditor who has…

A: A magazine access is used to report a business transaction in a organization's accounting records. A…

Q: Consider a bank account with the following transactions for the month of June 2021: No. of Days…

A: The average daily balance is a financial term that refers to the average amount of money in an…

Q: Selkirk Company obtained a $16,000 note receivable from a customer on January 1, 2024. The note,…

A: The objective of the question is to prepare the journal entries required on February 28, 2024, to…

Q: Sylvestor Systems borrows $174,000 cash on May 15 by signing a 90-day, 6%, $174,000 note. 1. On what…

A: Lets understand the basics.Notes payable an instrument issued by the borrower to the lender. This…

Q: Lone Star Company received a 90-day, 6% note for $80,000, dated March 12 from a customer on account.…

A: Journal Entry is the primary entry of business transactions. Every transaction has a dual effect…

Q: Accounting for notes receivable and accruing interest Carley Realty loaned money and received the…

A: 1. The maturity date of note 1, note 2 and note 3 are 31 March, 31 March and 18 December. The…

Q: Complete the following table for the simple discount notes. Use the ordinary interest method. Note:…

A: Discount Notes are short-term debt instruments that are issued by the government or companies to…

Q: Analyzing Interest-Bearing and Noninterest-Bearing Notes Consider the following three separate…

A: Bond valuation is the process of determining the fair or intrinsic value of a bond. The value of a…

Q: Wrigley Company issued the following notes during 20X1. Find the interest due on each of the notes,…

A: Notes Payable - Notes is an instrument issued by the payer to the receiver. It is a promissory note…

Q: Sunshine Service Center received a 120-day, 6% note for $40,000, dated April 12 from a customer on…

A: Notes receivable is a negotiable instrument that indicates the claims to be paid at a specific date…

Q: Complete the following table for the simple discount notes. Use the ordinary interest method. (Round…

A: Given, Amount due on maturity = 3200 Discount rate = 6.25% Time = 125 days

Q: Sylvestor Systems borrows $69,000 cash on May 15 by signing a 60-day, 8%, $69,000 note. 1. On what…

A: Formula: Interest expense = Notes amount x Time period x Interest rate

Q: Solve for maturity value, discount period, bank discount, and proceeds. Assume a bank discount rate…

A: Discount notes are a debt instrument used by companies to raise short-term debt. They do not offer…

Q: On September 1, Knack Company signed a $50,000, 90-day, 5% note payable with Central Savings Bank.…

A: Notes Payable - Notes Payable is an instrument issued by the payer to the receiver. It is a…

Q: Selkirk Company obtained a $15,000 note receivable from a customer on January 1, 2021. The note,…

A: Recording of journal entry for interest accrued and note discounted are as follows. When a company…

Q: Solve for maturity value, discount period, bank discount, and proceeds. Assume a bank discount rate…

A: Time value of money is the concept that is widely used by the management to determine the actual…

Q: Quick Tire and Lube received a 120-day, 8% note for $72,000, dated April 9 from a customer on…

A: Journal is a place where accounting transactions are listed in the book keeping system before ledger…

Question

Bencorp issues a $90,000, 6-month, noninterest-bearing note that the bank discounted at a 10%
discount rate.
Required:
1. Prepare the appropriate journal entry to record the issuance of the note.
2. Determine the effective interest rate.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Determine the effective interest rate. (Round your answer to 2 decimal places.)
Effective interest rate
10.00 %
< Required 1
Required 2

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

West County Bank agrees to lend Wildhorse Co. $472000 on January 1. Wildhorse Co. signs a $472000, 6%, 6-month note. What entry will Wildhorse Co. make to pay off the note and interest at maturity assuming that interest has been accrued to June 30? Notes Payable 486160 Cash 486160 Interest Payable 7080 Notes Payable 472000 Interest Expense 7080 Cash 486160 Notes Payable 472000 Interest Payable 14160 Cash 486160 Interest Expense 14160 Notes Payable 472000 Cash 486160
Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method On the first day of its fiscal year, Chin Company issued $26,500,000 of five-year, 12% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 13%, resulting in Chin receiving cash of $25,547,585. a. Journalize the entries to record the following: 1. Issuance of the bonds. 2. First semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) 3. Second semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) If an amount box does not require an entry, leave it blank. 1. 2. 3. 300 000 000 000 000 b. Determine the amount of the bond interest expense for the first year.
Sunset West issues a $90617, 60-day, 9% note to Memorial Point in exchange for an overdue account payable. For MEMORIAL POINT: What is the amount that is debited to cash when Sunset West pays the note? Ans_________________
Solve for maturity value, discount period, bank discount, and proceeds. Assume a bank discount rate of 9%. Use the ordinary interest method. (Use Days in a year table.) Note: Do not round intermediate calculations. Round your final answers to the nearest cent. $ Face value (principal) 27,200 Rate of interest 9% Length of note 60 days Maturity value Date of note August 23 Date note discounted September 18 Discount period Bank discount Proceeds eck
Selkirk Company obtained a $24,000 note receivable from a customer on January 1, 2021. The note, along with interest at 8%, is due on July 1, 2021. On February 28, 2021, Selkirk discounted the note at Unionville Bank. The bank's discount rate is 10%. Required: Prepare the journal entries required on February 28, 2021, to accrue interest and to record the discounting for Selkirk. Assume that the discounting is accounted for as a sale. (do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.). Tab 1) Record the accrued interest earned. Tab 2) Record the discounting of note receivable. Date General Journal Debit Credit February 28, 2021 ____________________________ ___________ ____________ _____________________________ ____________ ____________…
Check my Solve for maturity value, discount period, bank discount, and proceeds. Assume a bank discount rate of 7%. Use the ordinary interest method. (Use Days in.a year table) (Do not round Intermediate calculations. Round your final answers to the nearest cent.) Maturity value Date of Rate of Interest Length of note Date note discounted Proceede Face value (principal) 60,600 Discount perlod Bank discount note 90 days May 13 |days June 4
Sylvestor Systems borrows $51,000 cash on May 15 by signing a 120-day, 7%, $51,000 note. 1. On what date does this note mature? 2-a. Prepare the entry to record issuance of the note. 2-b. First, complete the table below to calculate the interest expense at maturity. Use those calculated values to prepare your entry to record payment of the note at maturity. Complete this question by entering your answers in the tabs below. Required 2B Interest at Maturity On what date does this note mature? Required 1 Required 2A On what date does this note mature? Required 2B General Journal
Valley Designs issued a 90-day, 10% note for $48,000, dated April 22, to Bork Furniture Company on account. Assume 360 days in a year when computing the interest. Question Content Area a. Determine the due date of the note. b. Determine the maturity value of the note.$___ Question Content Area c1. Journalize the entry to record the receipt of the note by Bork Furniture. If an amount box does not require an entry, leave it blank. notes receivable - Select - 0 accounts receivable - valley designs 0 - Select - Question Content Area c2. Journalize the entry to record the receipt of payment of the note at maturity. If an amount box does not require an entry, leave it blank. cash - Select - 0 notes receivable 0 - Select - interest revenue 0 - Select -
Complete the following table for the simple discount notes. Use the ordinary interest method. Note: Round your answers to the nearest cent. Amount due at maturity 4,400 Discount rate 6.25% Time 170 days Bank discount Proceeds