On April 15, 2019, Powell Inc. obtained a six-month working capital loan from its bank. The face amount of the note signed by the treasurer was $255,400. The interest rate charged by the bank was 5.00%. The bank made the loan on a discount basis.

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Chapter9: Current Liabilities, Contingencies, And The Time Value Of Money
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Exercise 7-5 (Algo) Notes payable—discount basis LO 2

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On April 15, 2019, Powell Inc. obtained a six-month working capital loan from its bank. The face amount of the note signed by the treasurer was $255,400. The interest rate charged by the bank was 5.00%. The bank made the loan on a discount basis. 

 

Exercise 7-5 (Algo) Part a - Journal entry

a-3. Record the journal entry to show the effect of signing the note and the receipt of the cash proceeds on April 15, 2019. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

 
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