The Oldest and Most Trusted Real Estate News Magazine

Journal entry for discounted note?


Question by Nick M: Journal entry for discounted note?
The journal entry a company uses to record the issuance of a discounted note for the purpose of borrowing funds for the business is

a. debit Cash and Interest Expense; credit Notes Payable

b. debit Cash and Interest Payable; credit Notes Payable

c. debit Accounts Payable; credit Notes Payable

d. debit Notes Payable; credit Cash

Best answer:

Answer by Old Guy

Give your answer to this question below!

Tags: , ,

  • EJ (Philippines)


    Suggested answer would have been:
    (Dr) Cash
    (Dr) Discount on notes payable
    (Cr) Notes Payable

    However, answer A is acceptable. Besides, the same could be corrected when adjusting entry is made.
    (Dr) Discount on notes payable
    (Cr) Interest expense

Sitemap Madbadcat Graphics