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Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall
Edition 9ISBN: 0073527068Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall
Edition 9ISBN: 0073527068 Exercise 1
Step-by-step solution
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Step 1 of 3
a. Discount basis means interest is paid in advance.
Proceeds = Face amount of note - Interest
= $300,000 - ($300,000 * 9% * 6/12)
= $300,000 - $13,500 =$286,500
April 15, 2010
Dr. Cash????????????? 286,500
Dr. Discount on Notes Payable????? 13,500
Cr. Notes Payable?????? ??????? 300,000
To record the proceeds of a short-term note payable (discount basis).
Step 2 of 3
Step 3 of 3
Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall
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