On November 1, 2021, FDN Trading accepted a 90-day, 8% P9,000,000 note from ABC Co. FDN immediately discounted with recourse the note to a bank that offers a 10% discount rate. FDN assumes the interest expense associated with this transaction. How much interest expense should FDN Trading debit on its records? Calculate the total interest expense and NOT the net interest expense.

On November 1, 2021, FDN Trading accepted a 90-day, 8% P9,000,000 note from ABC Co. FDN immediately discounted with recourse the note to a bank that offers a 10% discount rate. FDN assumes the interest expense associated with this transaction. How much interest expense should FDN Trading debit on its records? Calculate the total interest expense and NOT the net interest expense.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 15EA: Resin Milling issued a $390,500 note on January 1, 2018 to a customer in exchange for merchandise....

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Resin Milling issued a $390,500 note on January 1, 2018 to a customer in exchange for merchandise. The merchandise had a cost to Resin Milling of $170,000. The terms of the note are 24-month maturity date on December 31, 2019 at a 5% annual interest rate. The customer does not pay on its account and dishonors the note. Record the journal entries for Resin Milling for the following transactions. A. Initial sale on January 1, 2018 B. Dishonored note entry on January 1, 2020, assuming interest has not been recognized before note maturity
On June 1, Phillips Corporation sold, with recourse, a note receivable from a customer to a bank. The note has a face value of 15,000 and a maturity value (principal plus interest) of 15,400. The discount is calculated to be 385, and the accrued interest income is 100. The recourse liability is estimated to be 1,000. Prepare the journal entry of Phillips to record the sale of the note receivable.
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1. On November 1, 2021, FDN Trading accepted a 90-day, 8% P10,000,000 note from ABC Co. FDN immediately discounted with recourse the note to a bank that offers a 15% discount rate. On maturity date, ABC Co dishonoured the note. The bank charged processing fee of P80,000. How much is the total receivable of FDN Trading from ABC Co? 2. On November 10, 2021, FDN Trading purchased goods for resale at a list price of P500,000 less 10-5 on terms 40% down payment, balance 2/10, n/30. On November 13, FDN issued a debit memo for defective merchandise purchased amounting to P10,500. The account was paid in full on November 30, 2021. How much is the amount to be recorded as Purchases on November 10, 2021? 3. On November 15, FDN Trading signed a P370,000, 13 percent, 180-day note payable with the bank. The note was issued at a discount. How much cash did FDN Trading receive from this transaction?
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On Nov 1 2021, Calixo Co. accepted a 90 day, 8% $2,000,000 note from Harmony Trading. Calixo Co. immediately discounted with recourse the note to a blank that offers a 10% discount rate. On maturity date, Harmony Trading dishonored the note. The bank charged processing fee of $8,000. How much is the total receivable of Calixo Co. from Harmony Trading? show solution
On November 1, 2021, FDN Trading accepted a 90-day, 8% P10,000,000 note from ABC Co. FDN immediately discounted with recourse the note to a bank that offers a 15% discount rate. On maturity date, ABC Co dishonoured the note. The bank charged processing fee of P80,000. How much is the total receivable of FDN Trading from ABC Co?