Answered: On April 1, 2023, DMH Inc. signed a…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 3MC: On July 1, 2019, Aldrich Company purchased as an available-for-sale security 200,000 face value, 9%...

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On April 1, 2023, DMH Inc, signed a $111,000, zero-interest-bearing, six-month promissory note. The note's present value is $105,714 based on the bank's discount rate of 10%. The company's year-end is September 30,2023 and the note is repayable on October 1, 2023. (a). Prepare the journal entry on the books of DMH inc. to record the issue of the note. (Credit occount tities are outomatically indented when the amount is entered. Do not indent manually. List debit entry before credit entry. If no entry is required, select "No Entry" for the account tities and enter 0 for the amounts.)

Prepare the journal entry on the books of DMH Inc. to record the year-end interest accrual. (Round answers to 0 decimal
places, e.g. 5,125. Credit account titles are automatically indented when the amount is entered. Do not indent
manually. List debit entry before credit entry. If no entry is required, select "No Entry" for the account titles and
enter 0 for the amounts.)
te
Your answer is partially correct.
nber
30
Account Titles and Explanation
Interest Expense
Notes Payable
Debit
2643
Credit
4405

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