On November 1, 2009, a $216,000, 9-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.
3. Prepare the appropriate journal entry on December 31, 2009, to record interest on the note for the 2009 financial statements.
4. Prepare the appropriate journal entry(s) on July 31, 2010, to record interest and the payment of the note.

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The Answer of On November 1, 2009, a $216,000, 9-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.
3. Prepare the appropriate journal entry on December 31, 2009, to record interest on the note for the 2009 financial statements.
4. Prepare the appropriate journal entry(s) on July 31, 2010, to record interest and the payment of the note.

On November 1, 2009, a $216,000, 9-Month, Noninterest-Bearing Note Is