Question: On November 1, 2010, Edwin, Inc., borrowed cash and signed a $60,000, one-year note payable. Required 1. Compute the following items assuming (i) an interest-bearing

On November 1, 2010, Edwin, Inc., borrowed cash and signed a $60,000, one-year note payable.


Required

1. Compute the following items assuming (i) an interest-bearing note at 12%, (ii) a non-interest-bearing note discounted at 12%:

a. Cash received

b. Effective interest rate

c. Interest expense for 2010

2. Prepare the journal entries for Edwin, Inc., under each case for 2010 and 2011.


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