Question: On November 1, 2013, Edwin Inc. borrowed cash and signed a $60,000, 1-year note payable. Required: 1. Compute the following items assuming (a) an interest-bearing

On November 1, 2013, 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 2013

2. Prepare the journal entries for Edwin under each case for 2013 and 2014.

3. Next Level Why is the effective rate higher for the non-interest-bearing note?

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1 a Cash received 1 Interestbearing 60000 2 Noninterestbearing 60000 x 088 52800 b Effective interest rate 1 Interestbearing 12 2 Noninterestbearing 1... View full answer

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