Selkirk Company obtained a $15,000 note receivable from a customer on January 1, 2018. The note, along withinterest at 10%, is due on July 1, 2018. On February 28, 2018, Selkirk discounted the note at Unionville Bank. Thebank’s discount rate is 12%.Required:Prepare the journal entries required on February 28, 2018, to accrue interest and to record the discounting (roundall calculations to the nearest dollar) for Selkirk. Assume that the discounting is accounted for as a sale.
Selkirk Company obtained a $15,000 note receivable from a customer on January 1, 2018. The note, along withinterest at 10%, is due on July 1, 2018. On February 28, 2018, Selkirk discounted the note at Unionville Bank. Thebank’s discount rate is 12%.Required:Prepare the journal entries required on February 28, 2018, to accrue interest and to record the discounting (roundall calculations to the nearest dollar) for Selkirk. Assume that the discounting is accounted for as a sale.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Selkirk Company obtained a $15,000 note receivable from a customer on January 1, 2018. The note, along with
interest at 10%, is due on July 1, 2018. On February 28, 2018, Selkirk discounted the note at Unionville Bank. The
bank’s discount rate is 12%.
Required:
Prepare the
all calculations to the nearest dollar) for Selkirk. Assume that the discounting is accounted for as a sale.
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