A company accepted a trade note from AB Enterprises, face value $3,000, 15 percent interest-bearing, dated August 18, maturing in 180 days. Assume 360 days in a year.
Required:
Sixty days prior to the maturity of the note, the company endorsed the note with recourse (discounted) to XY Finance Company at a 9 percent annual rate. Compute the following:
(a) The company's proceeds from the note $_________________.
Computations:
(b) The company's interest earned (net of discount) $___________.
Computations:
(c) Give the journal entry for the company to record the discounting transaction, assuming that the end of their fiscal year is June 30. The discounting is to be recorded as a sale. Assume interest revenue was not recorded before the discounting.

Question

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The Answer of A company accepted a trade note from AB Enterprises, face value $3,000, 15 percent interest-bearing, dated August 18, maturing in 180 days. Assume 360 days in a year.
Required:
Sixty days prior to the maturity of the note, the company endorsed the note with recourse (discounted) to XY Finance Company at a 9 percent annual rate. Compute the following:
(a) The company's proceeds from the note $_________________.
Computations:
(b) The company's interest earned (net of discount) $___________.
Computations:
(c) Give the journal entry for the company to record the discounting transaction, assuming that the end of their fiscal year is June 30. The discounting is to be recorded as a sale. Assume interest revenue was not recorded before the discounting.

A Company Accepted a Trade Note from AB Enterprises, Face