Concord Corporation issued a 5-year, $82,000, zero-interest-bearing note to Brown Company on January 1, 2020, and...
Concord Corporation issued a 5-year, $82,000, zero-interest-bearing note to Brown Company on January 1, 2020, and received cash of $48,663. The implicit interest rate is 11%.
Prepare Concord’s journal entries for (a) the January 1 issuance and (b) the December 31 recognition of interest.
Homework Answers
| Debit | Credit | |||
| January 1 | Cash | 48663 | ||
| Discount on Notes Payable | 33337 | |||
| Notes Payable | 82000 | |||
| December 31 | Interest Expense | 5353 | =48663*11% | |
| Discount on Notes Payable | 5353 |
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