On October 1,2015,Harrison Company borrowed money by issuing a $24,000 face value discount note to its bank.The note had an 8% discount rate and had a term of 1 year.On that date,Harrison recorded a Discount on Notes Payable in the amount of $1,920.

Question

Quizplus · Accepted Answer

This is true as the discount on the note payable is calculated by multiplying the face value of the note ($24,000) by the discount rate (8%) and the term (1 year). Therefore, $24,000 x 8% x 1 year = $1,920, which is the amount recorded as Discount on Notes Payable.

On October 1,2015,Harrison Company Borrowed Money by Issuing a $24,000