Greeson Corp. signed a three-month, zero-interest-bearing note on November 1, 2014, for the purchase of $250,000 of
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Greeson Corp. signed a three-month, zero-interest-bearing note on November 1, 2014, for the purchase of $250,000 of inventory. The face value of the note was $253,900. Assuming Greeson used a “Discount on Note Payable” account to initially record the note and that the discount will be amortized equally over the 3-month period, the adjusting entry made on December 31, 2014, will include an
a. debit to Discount on Note Payable for $1,300.
b. debit to Interest Expense for $2,600.
c. credit to Discount on Note Payable for $1,300.
d. credit to Interest Expense for $2,600.
Related Book For
Horngrens Financial and Managerial Accounting
ISBN: 978-0133255584
4th Edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura
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