Wenzy Company discounted its own ₱250,000 one-year note at a bank, at a discount rate of 12% when the prime rate was 10% Based on the above data, answer the following: 1. In reporting the note in Wenzy’s statement of financial position prior to maturity, what rate should Wenzy use for the recording of interest expense? a. 10.0% c.12.0% b. 10.7% d.13.6% 2. The journal entry to record the transaction will include a a. Debit to Cash ₱250,000 b. Debit to Cash for ₱220,000 c. Debit to Discount on notes payable ₱40,000 d. Credit to Notes payable, ₱220,000
Wenzy Company discounted its own ₱250,000 one-year note at a bank, at a discount rate of 12% when the prime rate was 10% Based on the above data, answer the following: 1. In reporting the note in Wenzy’s statement of financial position prior to maturity, what rate should Wenzy use for the recording of interest expense? a. 10.0% c.12.0% b. 10.7% d.13.6% 2. The journal entry to record the transaction will include a a. Debit to Cash ₱250,000 b. Debit to Cash for ₱220,000 c. Debit to Discount on notes payable ₱40,000 d. Credit to Notes payable, ₱220,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Wenzy Company discounted its own ₱250,000 one-year note at a bank, at a discount rate of 12% when the prime rate was 10%
Based on the above data, answer the following:
1. In reporting the note in Wenzy’s statement of financial position prior to maturity, what rate should Wenzy use for the recording of interest expense?
a. 10.0% c.12.0%
b. 10.7% d.13.6%
2. The journal entry to record the transaction will include a
a. Debit to Cash ₱250,000
b. Debit to Cash for ₱220,000
c. Debit to Discount on notes payable ₱40,000
d. Credit to Notes payable, ₱220,000
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