On January 1, 2007 the Johnson Corporation issued a two-year note due December 31, 2008, with a

Question:

On January 1, 2007 the Johnson Corporation issued a two-year note due December 31, 2008, with a face value of $10,000, receiving $7,694.68 in exchange.

Required

Prepare the journal entries to account for the note:

1. On the date the note is issued

2. At the end of 2007

3. At the end of 2008

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... 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...