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    Chief78's Avatar
    Chief78 Posts: 6, Reputation: 1
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    #1

    Apr 5, 2008, 04:08 PM
    Notes Payable
    On August 31, Pell Co. partially refunded $180,000 of its outstanding 10% note payable made one year ago to National Bank by paying $180,000 plus $18,000 interest, having obtained the $198,000 by using $52,400 cash and signing a new one-year $160,000 not discounted at 9% by the bank.

    a) Make the entries to record the partial refunding. Assume Pell Co. makes reversing entries when appropriate.

    b)Prepare the adjusting entry at December 31, assuming straight-line amortization of the discount.
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    morgaine300 Posts: 6,561, Reputation: 276
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    #2

    Apr 6, 2008, 12:27 PM
    Please read this for rules concerning posting homework question:

    https://www.askmehelpdesk.com/math-s...board-b-u.html

    You need to show us that you've at least made an attempt to do your own work, or ask a specific question about where exactly you're stuck. We are not here just to do your work for you.
    Chief78's Avatar
    Chief78 Posts: 6, Reputation: 1
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    #3

    Apr 6, 2008, 01:59 PM
    Here is what I have come up with:

    Aug 31 DB-Notes Payable 180,000
    DB-Interest Payable 18,000
    CR-Cash 52,400
    CR-Notes Payable 145,600
    Dec 31 DB-Interest Expense 14,400
    CR-Interest Payable 14,400
    DB-Interest Expense 14,400
    CR-Discounts on Notes Payable 14,400
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