lovethepirk
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Joined: 10 Jul 2009
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Posts: 295
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| Posted: 23 Oct 2009 at 14:20 | IP Logged
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Whew, I got my arms around this now. This is my last question:
Given this problem: (I'll repost it)
Ace Co. sold to King Co. a $20,000, 8%, 5-year note that
required five equal annual year-end payments. This note
was discounted to yield a 9 % rate to King.
King(lender) at inception:
N/R........................20,000
Discount on N/R...................510
Cash..............................19,490
Since the principle is being paid here can you help me with the journal entries for yr 1 payment when there is a discount account as well:
Cash......................5010
Discount on N/R.......?????
Interest Revenue.............1754.10(.09x19,490)
N/R................................???????
Discount on N/R is no longer a 'plug' so I was unsure how to do it. Look somewhat correct though?
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Topic: Note Receivable/Discounting (F4)
Topic Closed)
