On November 1, 2019, Edwin Inc. borrowed cash and signed a $60,000, 1-year note payable. Required: 1.
Question:
On November 1, 2019, Edwin Inc. borrowed cash and signed a $60,000, 1-year note payable.
Required:
1. Compute the following items assuming (a) an interest-bearing note at 12%, (b) a non-interest-bearing note discounted at 12%:
a. Cash received
b. Effective interest rate
c. Interest expense for 2019
2. Prepare the journal entries for Edwin under each case for 2019 and 2020.
3. Next Level Why is the effective rate higher for the non-interest-bearing note?
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Step by Step Answer:
1 a Cash received 1 Interestbearing 60000 2 Noninterestbearing 60000 088 52800 b Effective interest ...View the full answer
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Related Book For 
Intermediate Accounting Reporting and Analysis
ISBN: 978-1337788281
3rd edition
Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach
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