On August 3 1 , 2 0 2 0 , Red Leaf Corp paid the Montreal Dominion Bank part of an outstanding $ 3 0 0 , 0 0 0 long term 1 0 note payable obtained one year earlier ( August 3 1 , 2 0 1 9 ) , by paying $ 1 8 0 , 0 0 0 plus $ 1 8 , 0 0 0 interest In order to do this, Red Leaf used $ 5 1 , 2 1 1 cash and signed a new one year, zero interest bearing $ 1 6 0 , 0 0 0 note discounted at 9 by Montreal Dominion Bank ( i e , the bank issued a note at a discount designed to provide a 9 return over the one year period ) Required a Prepare the entry to record the refinancing b Prepare the adjusting entry at December 3 1 , 2 0 2 0 in connection with the new zero interest bearing note

Question

On August 3 1 , 2 0 2 0 , Red Leaf Corp  paid the Montreal Dominion Bank part of an outstanding $ 3 0 0 , 0 0 0 long   term 1 0   note payable obtained one year earlier ( August 3 1 , 2 0 1 9 ) , by paying $ 1 8 0 , 0 0 0 plus $ 1 8 , 0 0 0 interest  In order to do this, Red Leaf used $ 5 1 , 2 1 1 cash and signed a new one   year, zero   interest   bearing $ 1 6 0 , 0 0 0 note discounted at 9   by Montreal Dominion Bank ( i   e   , the bank issued a note at a discount designed to provide a 9   return over the one year period )   Required a   Prepare the entry to record the refinancing  b   Prepare the adjusting entry at December 3 1 , 2 0 2 0 in connection with the new zero interest bearing note

SolutionInn · Accepted Answer

The Answer is in the image, click to view ...

Question: On August 3 1 , 2 0 2 0 , Red Leaf Corp. paid the Montreal Dominion Bank part of an outstanding $ 3 0

Step by Step Solution

Students Have Also Explored These Related Accounting Questions!