ABC company issued a promissory note to DEF bank. Details from the promissory note as follows: Date of note: November 15,2020 Term of note: 6 months Principal: $120,000 Interest rate: 12% Interest was not discounted on the date of note issuance Questions: 1) What is the type of adjustment? 2) Adjusting entry on December 31 3) Should the adjustment was not made, what would be the effect on net income?

ABC company issued a promissory note to DEF bank. Details from the promissory note as follows: Date of note: November 15,2020 Term of note: 6 months Principal: $120,000 Interest rate: 12% Interest was not discounted on the date of note issuance Questions: 1) What is the type of adjustment? 2) Adjusting entry on December 31 3) Should the adjustment was not made, what would be the effect on net income?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 28E: On January 1, 2019, Northfield Corporation becomes delinquent on a 100,000, 14% note to First...

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