Interest-Bearing and Non-Interest-Bearing Notes On December 11, 2019, Hooper Inc. made a credit sale to Marshall Company and required Marshall to sign a $12,000,60-day note. Required: Prepare the journal entries necessary to record the receipt of the note by Hooper, the accrual of interest on December 31, 2019, and the customer's repayment on February 9, 2020, assuming: 1. Interest of 12% was in addition to the face value of the note. 2. The note was issued as a $12,000 non-interest-bearing note with a present value of $11,765. The implicit interest rate on the note receivable was 12%. Assume a 360-day year. (Round to the nearest dollar.)
Interest-Bearing and Non-Interest-Bearing Notes On December 11, 2019, Hooper Inc. made a credit sale to Marshall Company and required Marshall to sign a $12,000,60-day note. Required: Prepare the journal entries necessary to record the receipt of the note by Hooper, the accrual of interest on December 31, 2019, and the customer's repayment on February 9, 2020, assuming: 1. Interest of 12% was in addition to the face value of the note. 2. The note was issued as a $12,000 non-interest-bearing note with a present value of $11,765. The implicit interest rate on the note receivable was 12%. Assume a 360-day year. (Round to the nearest dollar.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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about the homework of Intermediate Accounting: Reporting and Analysis 3rd Edition Chapter 6, Problem 17E
Transcribed Image Text:Interest-Bearing and Non-Interest-Bearing Notes On December 11,
2019, Hooper Inc. made a credit sale to Marshall Company and required
Marshall to sign a $12,000,60-day note.
Required:
Prepare the journal entries necessary to record the receipt of the note
by Hooper, the accrual of interest on December 31, 2019, and the
customer's repayment on February 9, 2020, assuming:
1. Interest of 12% was in addition to the face value of the note.
2. The note was issued as a $12,000 non-interest-bearing note with
a present value of $11,765. The implicit interest rate on the note
receivable was 12%. Assume a 360-day year. (Round to the nearest
dollar.)
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