A $90,000, 6-month, noninterest-bearing note is discounted at the bank at a 10% discount rate.
Required:
1. Prepare the appropriate journal entry to record the issuance of the note.
2. Determine the effective interest rate.

Question

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The Answer of A $90,000, 6-month, noninterest-bearing note is discounted at the bank at a 10% discount rate.
Required:
1. Prepare the appropriate journal entry to record the issuance of the note.
2. Determine the effective interest rate.

A $90,000, 6-Month, Noninterest-Bearing Note Is Discounted at the Bank