On October 1, 2024, Fresh Prince Company issued to Carlton Bank a $600,000, 8-month, noninterest-bearing note. Interest

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On October 1, 2024, Fresh Prince Company issued to Carlton Bank a $600,000, 8-month, noninterest-bearing note. Interest was discounted by the bank at a 12% discount rate.
Required:
1.Prepare the appropriate journal entry by Fresh Prince to record the issuance of the note.
2.Determine the effective interest rate of the discounted note. Note: Do not round intermediate calculations and round your final answer to 2 decimal places.
3.Suppose the note had been structured as a 12% note with interest and principal payable at maturity. Prepare the appropriate journal entry to record the issuance of the note by Fresh Prince.
4.Prepare the appropriate journal entry on December 31, 2024, to accrue interest expense on the note described in requirement 3, for the 2024 financial statements.

Date	Accounts	Debit	Credit

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Intermediate Accounting

Intermediate Accounting

ISBN: 9781264134526

11th Edition

Authors: David Spiceland

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Posted Date: Apr 18, 2023 12:53 AM

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