Partial Refund of Note Payable, Straight line Amortization
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On August 31, Jenks Co. partially refunded $180,000 of its outstanding 10% , note payable, made 1 year ago to Arma State Bank by paying $180,000 plus $18,000 interest (having obtained the $198,000 by using $52,400 cash and siging a new 1-year $160,000 note discounted at 9% by the bank)
1. Make the entry to record the partial refunding. Assume Jenks Co. makes reversing entries when appropriate.
2. Prepare the adjusting entry at December 31, assuming straight-line amortization of the discount.
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Solution Summary
On August 31, Jenks Co. partially refunded $180,000 of its outstanding 10% , note payable, made 1 year ago to Arma State Bank by paying $180,000 plus $18,000 interest (having obtained the $198,000 by using $52,400 cash and siging a new 1-year $160,000 note discounted at 9% by the bank)
1. Make the entry to record the partial refunding. Assume Jenks Co. makes reversing entries when appropriate.
2. Prepare the adjusting entry at December 31, assuming straight-line amortization of the discount.
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Notes payable, Discounted Note Payable, Partial Refund of Note Payable, Amortization ...
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