2. Notes payable.
On August 31, Grant Co. partially refunded $180,000 of its outstanding
10% note payable made one year ago to Arma State 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 note discounted at 9% by the
Bank.
Instructions
(1) Make the entry to record the partial refunding. Assume Grant Co.
Makes reversing entries when appropriate.
(2) Prepare the adjusting entry at December 31, assuming straight-line
Amortization of the discount.
