As payment for services rendered, the company received a 24-month note on January 1. The face amount
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As payment for services rendered, the company received a 24-month note on January 1. The face amount of the note is $1,000; the note is non-interest-bearing. The cash price of the services rendered is $857. The market rate of interest is 8%, compounded annually. The $1,000 face amount of the note will be received at the end of the 24-month period. Make all journal entries necessary on the books of the recipient of the note during the 24-month life of this note. Don’t forget any necessary year-end adjusting entry. The cash will be received on December 31 of the second year.
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Year 1Notes Receivable 1000 Jan 1 Discount on Notes Receivable 143 Service Revenue 857 Year 1 ...View the full answer
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Related Book For
Intermediate Accounting
ISBN: 978-0324592375
17th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen
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