Bricca Co. issued a $60,000 face value discount note to First Bank on June 1, 2016. The
Question:
Bricca Co. issued a $60,000 face value discount note to First Bank on June 1, 2016. The note had a 6 percent discount rate and a one-year term to maturity.
Required
Prepare general journal entries for the following transactions:
a. The issuance of the note on June 1, 2016.
b. The adjustment for accrued interest at the end of the year, December 31, 2016.
c. Recording interest expense for 2017 and repaying the principal on May 31, 2017.
Discount RateDepending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...
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Bricca Co General Journal Date Account Titles Debit Credit a 6116 Cash 1 56...View the full answer
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Related Book For 
Fundamental Financial Accounting Concepts
ISBN: 978-0078025907
9th edition
Authors: Thomas Edmonds, Christopher Edmonds
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