Q1) Notes payable - discount basis. On August 1, 2009, Colombo Co's treasurer signed note promising to pay $240,000 on December, 2009. Proceeds of the note were $232,000.
Compute the discount rate used by lender?
Write journal entry to illustrate effects of (a) signing note and receipt of cash proceeds on Aug 1, 2009. (b) Recording interest expense for month of September. (c) Repaying note on December 31, 2009.